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Chart of the Day: Netflix

We recently launched share trading on US stocks, and one name that clients will likely focus on is Netflix.

Chart of the Day - July 15, 2019 - Netflix daily chart

With Q2 earnings due before Thursday’s open, investors will have a chance to react to the outlook on content plans, cash flow, and expected trends on average revenue per user (APRU). Trading Netflix is certainly not for the risk-averse, with a 6.2% implied move on the day of earnings. So, for any traders in this name should consider the implied volatility when looking at risk and position sizing.

Netflix has a reasonable pedigree of beating expectations, having beaten consensus on six of the past eight quarters of revenue. But when we look at fundamentals in a name like Netflix, it’s not just the Q2 earnings numbers that drive price. Investors will also focus on variables such as subscriber add guidance and churn.

As we can see from the daily chart, US$386.07 has acted as strong resistance since October 2018. So, a break here would be a powerful statement from the bulls. One for the radar, as a daily close through this ceiling, would suggest we could see US$400 in play.

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