Looking for a good stock to watch? Try Netflix ($NFLX) (May 15, 2020)
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I want to look at Netflix ( NASDAQ: NFLX ) today because this stock is coming out of a bit of a squeeze. It is not like a super-tight squeeze but it is coming out; it closed at a new high yesterday, it printed a new high and then fell back. So today the stock was actually pretty strong right into the close. It popped out of this squeeze during the day and just kept going. And at the same time, the QQQs ( NASDAQ: QQQ ) were also kind of drifting higher so this was kind of more or a general market lift on all of these stocks.
But if you look at Netflix ( NASDAQ: NFLX ), this is what I like about this stock: I like the weekly chart. So up until back here in April, before what would typically be tax day the stock was bumping up here against $400.00 and I think it was like 250.00 down here, so it was in about a $150.00 range for a couple of years.
Now, I have a really complicated way to measure a move on a stock like this that will give me kind of an estimate of where I think the stock is going to go and I am going to share it with you so I want you to take notes. This is my complex method for figuring out a measured move here. I look at where the low here was, we’ll say it’s about 250.00; and then the high we will say is around $400.00. So 400.00 – 250.00 is $150.00, so that’s the channel.
Then what we want to do is, anytime the stock comes back to 300.00 or below that’s when you want to buy. And then when the stock gets up close to 400.00 that’s when you want to sell. But then once the stock breaks out, this is a weekly chart so it kind of has to hold it there a bit, so it broke out, came back, tested it and now it’s up to 450.00, that would be $50.00 more than 400.00.
So we say; Well, all right, how high do we think this stock is going to go? I will tell you how high; we take this 150.00, again, 400.00 – 250.00, that’s $100.00. We add 150.00 to 400.00 and what do we get? We get 550.00. That’s what we are seeing here; we get a price target of $550.00 over the long-term.
But then as I look the stock more and more I am thinking, I am looking for 550.00 but really 600.00 feels a little bit better to me. So I am looking for kind of a minimum of 550.00 but I am hoping, I’ve got my fingers crossed, and I know hope isn’t a real viable method but it is used a lot in trading and in a lot of things; typically, not with great success but that’s why we are keeping some down here at 550.00.
So I think you are buying the stock right now at a new high. You are buying the stock here and you are looking for $100.00. So if you can get $100.00 out of this puppy that would be a pretty good trade in my book. But it’s not going to take a week or a month or something like that; I think it will take several months to get to that point.
One thing about Netflix ( NASDAQ: NFLX ), it used to be where Netflix ( NASDAQ: NFLX ) was the media company of old B movies that you never liked the first time around. Movies like the original Footloose or the remake, which was arguable worse than the first one or some of these just really old bad movies that you were happy to have forgotten about until you saw that crap on Netflix ( NASDAQ: NFLX ) again, they are kind of a different media company now.
My wife and I kind of binge watch stuff on Netflix ( NASDAQ: NFLX ) and it is really, really smart stuff like the Ricky Gervais thing, his series was excellent. They are on and on and on, and I am not pumping different series, though it was fun to see Ricky Gervais at the Oscars, I hope he is a permanent fixture there. But Netflix ( NASDAQ: NFLX ) is just the kind of company that, they’re going to thrive going forward. They already are, the darn thing is at an all-time high; take that Disney ( NYSE: DIS ).
I think Netflix ( NASDAQ: NFLX ) is a stock that you can buy, I would say right here right now but you’re probably watching this on the weekend so you can’t do it. Let’s just say on Monday you are buying this stock here, maybe give it 7 or 8 percent of a stop loss, something like that. My bet is, you’re going to make money.
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