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Netflix

Market Opportunities - 25/08/2020

25 August, 2020

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

Netflix uptrend opportunity based On 1.00 Lot Calculation:

  • Netflix is one of the few companies in the world whose shares increased during the Coronavirus crisis, hitting all time high $575.17 on July 13 due to increasing number of subscribers during Coronavirus crisis and ‘Stay-At-Home” recommendation in the US and rest of the world.
  • According to the latest financial statements, reported on July 16, during the second quarter, Netflix added more than 10 million subscribers, well above management's forecast for 7.5 million, thanks to the coronavirus pandemic, leading quarterly revenues to come in well above street estimates, but, after the Q2 results were reported, the stock price fell almost 10% due to less than expected outlook about number of new subscribers in the next quarter. The company forecasted 2.5M new subscribers while the market expected at least 5M new subscribers.
  • Despite this unexpected outlook, the institutional investors strongly believe that this number of new subscribers in the next quarter is too pessimistic and they expect that Netflix will easily beat these figures. In a line with that expectation many analysts, after the Netflix results for Q2 were published, increased their price target up to $625 which was published by J.P Morgan analysts.
  • Netflix stock fell more than 15% since July 13, but despite this drop, the price managed to stay above the positive trend line. According to the Daily chart, the price is in the positive truck supported by major technical indicators. The Daily RSI is slightly above pivot mark of 50, moving upward toward mark of 70, which can be considered as a first resistance level. The upward trend is also supported by the 20-day, 50-day and 200-day Moving averages which are all below current price. If the price manages to stay above the positive trend line, the Netflix price may reach Resistance 1 level of 503.0.

Netflix, August 25, 2020
Current Price: 487.0

Netflix

Weekly

Trend direction

UP

Resistance 3

535.0

Resistance 2

519.0

Resistance 1

503.0

Support 1

471.0

Support 2

455.0

Support 3

439.0

Example of calculation base on weekly trend direction for 1.00 Lot*

Netflix

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

48,000.00

32,000.00

16,000.00

-16,000.00

-32,000.00

-48,000.00

Profit or loss in €**

40,574.81

27,049.87

13,524.94

-13,524.94

-27,049.87

-40,574.81

Profit or loss in £**

36,638.42

24,425.62

12,212.81

-12,212.81

-24,425.62

-36,638.42

Profit or loss in C$**

63,408.00

42,272.00

21,136.00

-21,136.00

-42,272.00

-63,408.00

* 1.00 lot is equivalent of 1000 units
** Calculations for exchange rate used as of 10:20 (GMT+1) 25/08/2020
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Senior Account Manager regarding their use.
*** You may wish to consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Senior Account Manager for more details

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