We’re still using the 295 target that was proffered when NFLX was selling for around 245. The stock is obviously a favorite of institutional money-runners who presumably are too stupid and/or lazy to find another ‘story stock’ on which to train their OPM firepower. I’m not nearly as impressed as they with the company’s streaming catalogue, which stinks, nor even with their magic algorithm that supposedly tells us which movies we should want to see. Still less impressive is their chance of success as a content producer, a game that has proven tricky even for such by-the-numbers, focus-group-driven pros like Disney. The foregoing notwithstanding, Netflix remains a bull trade at least until the target is reached. Camouflage entries will be tricky at best because the trend is so well-developed, but I’d suggest using the one-minute chart to jump on any follow-through (i.e., C-D leg) rally that develops after a gap-up opening. More often than not in this stock, such price action has proven to be a buying opportunity rather than a bull trap. ______ UPDATE (6:50 p.m. EDT): Longs using the 1:3 risk reward ratio that I’ve suggested be held constant over the life of a trade should have exited yesterday no lower than around 287. Because the high was around 290, $5 shy of our target, any swing of more than $1.67 (or so) against us should have tripped the 287 stop-loss implied by the 1:3 formulation. Please note that the 295 target remains valid nonetheless.
