Netflix appears to be topping less than $1 from the 369.09 target shown. The stock is likely to at least struggle for altitude in the weeks ahead, since the Hidden Pivot resistance that has stopped it is so clear and compelling. If and when buyers return in droves, as they always have, look for the next bullish cycle to hit 426.82, an even more important Hidden Pivot that in my estimation has an 80% chance of being reached. This assessment is based on the ease with which buyers pushed past a midpoint Hidden Pivot at 349.02 that is associated with the target.   In the meantime, assuming the stock trades no higher than last week’s 369.83 peak, a corrective dip to 310.12 would generate a ‘mechanical’ buy signal, stop 271.21. Since that trade implies initial risk of nearly $4000 per round lot, we’ll want to convert the signal to a ‘camouflage’ set-up, reducing the ante by as much as 95%, if the opportunity should arise. The best place to keep on top of this in real time is in the Rick’s Picks chat room, but any timely alert would also be sent to subscribers via email.

Too Much Competition

Notwithstanding the bullish technical picture, I consider NFLX to be the most overrated FAANG stock, priced too rich for the product it delivers. Compared to HBO, for one, Netflix content is second-rate. This is a matter of taste, I know, but a movie-lover could click past several hundred titles offered online by Netflix and not find a single one with an actor one has heard of, let alone one that is worth watching. As for the shows that Netflix has produced for subscribers, the supposed best of them — House of Cards — never rose to the level of Deadwood, The Sopranos, 24, Boardwalk Empire, and other episodic offerings from some competitors.  Those competitors are not sitting on their thumbs, either, and the ‘content’ space is growing increasingly crowded with aggressive, talented players like Disney, Time Warner, Amazon and Hulu.  Although Netflix has shown itself to be adept at leveraging its huge customer base, it is predictable that in so competitive an environment it will become increasingly costly to hang onto subscribers. With a capitalization of around $150 billion, any such expectations are not priced into the stock. I would still hold it to the 426.82 price objective given above, but at that level you should consider exiting the position or doing deep-in-the-money covered-writes. _______ UPDATE (June 13, 5:02 p.m. EDT): Buyers have blown past the 369.09 Hidden Pivot resistance with such force that we can only assume the 426.82 target is well in play. The stock can be bought only ‘mechanically,’ as far as I’m concerned. If you trade it and would like to try, please let me know in the chat room. _______ UPDATE (June 14, 10:53 p.m.): The 398.66 target looks ripe for shorting, especially if it’s hit in the early going on Friday. I will post a ‘jackpot’ bet in the chat room shortly, assuming I can identify a low-risk opportunity.______ UPDATE (June 15, 10:41 a.m.):  The jackpot trade worked better than I could have imagined. With NFLX trading down $4 ahead of the opening bell, I switched my game, recommending that calls be purchased instead of puts. Subscribers reported buying June 15 395 calls for as little as 0.60 — their exact low of the day, as it happened — just before the option reversed, exploding to a so-far high of 4.95 (a more-than-octupling in price!).  All subscribers who did the trade reported making money. If you want to see how they did it in various ways, chck out the chat room discussion beginning with my 9:23 a.m. post, a detailed trading recommendation ahead of the opening bell. NFLX performed like a champ, as we might have expected. It rallied 11.35, topping at 398.86 — 20 cents from 398.66 rally target given above. It did so WITH THE DOW DOWN NEARLY 200 POINTS! We definitely picked the right horse.