Netflix (NFLX) – Bearish Earnings Options Action Trade for July 16th, 2018

On Friday’s Options Action, the crew analyzed the performance of Netflix (NFLXWealth Strength IndexNFLX is Extremely Flat and trending Down) stock. NFLXWealth Strength IndexNFLX is Extremely Flat and trending Down has recently broken out to the upside of a 10 year ascending wedge formation, which is extremely bullish. That bullish trend has however turned parabolic, which suggests that there are greater risks to the downside and primed for a possible correction. Coupled with a double top formation and earnings this week, the stock would need a signifcant beat to continue it’s bullish trend. Expecting NFLXWealth Strength IndexNFLX is Extremely Flat and trending Down to possibly pull back on earnings, Michael Khouw suggests buying an Aug 350/370/395 Put Butterfly for a $5.00 Debit. As of Friday’s close, this spread is trading at $5.00.

We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: NFLXWealth Strength IndexNFLX is Extremely Flat and trending Down Options Action

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