NFLX | Netflix Stocks Trading Journal with VantagePoint

VantagePoint Trading Software is a forecasting tool that uses both end of day data and artificial intelligence to provide traders a forecast of market movement. These forecasts are 1-3 days in advance and help traders improve their timing on making trades and maximizing profit potential. The artificial intelligence software forecasts market movement for stocks, futures, Forex and ETFs. NFLX in focus today….

This journal entry looks at the recent market movements of Netflix. NASDAQ: NFLX.

VantagePoint Trading Journal NFLX

It seems that the broad market has shrugged off recent concerns and is starting to show continued strength. In the same way, we can analyze individual stocks, futures or ETFs using the VantagePoint platform with its artificial intelligence predictive software technology, we can apply the methodology to broad indexes like the S&P, Dow, and the Russell. All three of these major indexes continue to show strength. This allows traders to find bullish opportunities. Let’s look at Netflix (NFLX):

image of NFLX trading diary with VantagePoint
Netflix is in the news after announcing they are raising their rates. VantagePoint indicated an uptrend the day before.

Using the predictive indicators found within VantagePoint, we can note two significant things. The first is the occurrence of a bullish crossover. We see this because of the blue predictive moving average crossing above the black simple 10-day moving average on 10/04/17. We get a confirmation of this bullish move thanks to the VantagePoint neural index indicator. It predicts short-term strength when it’s in the one (1) position. The VantagePoint neural index moved from the zero (0) to the one (1) position when the crossover occurred. This crossover and confirmation combo allows VantagePoint users to confidently anticipate strength in NFLX in the next few days.

If one were a straight stock trader, simply purchasing the stock in the $185.00 area could prove to be prudent in anticipation of a continued move to the upside.  This would be a conservative way to enter into the market in NFLX because you don’t have the limitation of time that is associated with other trading strategies.  If one were to trade stock in this scenario it would also be prudent to place a stop order in the $180.00 area to mitigate potential losses.

If one were a more active trader with a shorter investment time horizon, a play with options could prove to be advantageous as well.  It should be noted that implied volatility is quite elevated for NFLX.  Why is that?  Any expirations with an expiration past 10/16/17 will have an embedded earnings report risk associated with it.  Elevated levels of implied volatility mean more premium to potentially collect but we don’t necessarily assume that risk so let’s consider the 10/13/17 weekly expiration options.  The measured move through the October 13th weekly expiration on 10/13/17 is calculated to put NFLX in the $205.00 – $210.000 area or approximately a 4% move.  If this assumption proves true, perhaps utilizing the weekly October 13th expiration options with a credit vertical spread would make sense.  The 190/192.5 bull put credit vertical is trading $1.00 today.  The total risk for this spread is the width of this spread ($2.50) less what you collect in premium ($1.00) for a net of $1.50 of risk.  The potential maximum profit is the amount of premium collected ($1.00).  This yields a risk to reward ratio of 1.5:1.

image of vantage point software banner'

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »