The shares of streaming giant Netflix Inc (NASDAQ:NFLX) pulled back alongside the broader market, logging losses in the past four sessions after hitting a Feb. 14 record high of $1,064.50. However, the security was last seen 2.3% higher to trade at $998.53, approaching a historically bullish trendline that fueled its climb to that peak and could provide additional tailwinds.
According to Schaeffer's Senior Quantitative Analyst Rock White, NFLX is nearing its 50-day moving average after spending a significant stretch above it. Specifically, 80% of the past two months, and eight of the last 10 trading days. In the last three years, the stock triggered this signal nine times, with a one-month gain occurring 67% of the time and averaging a 5.8% return. A similar move would place NFLX back above $1,050.
Despite the recent dip, the stock remains a strong performer, boasting an 12.2% year-to-date lead and a 66.3% gain over the past 12 months. The equity has climbed higher every month since August and is on track for its seventh consecutive monthly win.
Bearish bets have been piling up over the past two weeks, with Netflix stock's 10-day put/call volume ratio of 1 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranking in the 88th percentile of its annual range. This suggests an unusually high preference for puts over calls among traders, even as the equity trades near record highs.
Meanwhile, options appear to offer an attractive way to speculate on NFLX's next move. The stock's Schaeffer's Volatility Index (SVI) of 31% ranks in the 16th percentile of its annual range, indicating relatively low volatility expectations -- a boon for premium buyers.
