In a span of 21 calendar days, Netflix made a high of 1064.50 on Feb 14 and a recent low this past Friday of 858.07 which is very close to 20% pullback. Recent analysts who cover the stock were bearish on the name to begin the trading day on Thursday of last week offering an 850 price target when the stock price was trading nicely in the upper 900's. Well, we almost made it there and the push off that bottom almost appeared to make it look like a potential recovery. Let's clarify first that the stock price has blossomed over 540% in past three years, so had you invested in this even a couple of years after the pandemic lows, you would've banked a good chunk of change had you liquidated this at or about the recent all-time-highs. Just off the recent highs, this stock was trading at 50X earnings and therefore among tech favorites, it remained an extremely expensive name.

Recent weakness in the stock over the past few sessions appears to be largely driven in weakness in the options market which has in recent days driven interest in the pricey stock a lot lower. Market cap following this close to 20% liquidation has driven the market cap to 381.28B from almost being above 425B at one point. Let's face it, from the pandemic timeframe to about Feb'25, Netflix stock price has had an unbelievable run, with investors and speculators especially in the options market have left this overbought and considerably overvalued. The stock is now nearly 20% off the highs and it is our opinion that if the recent decline in the broad market stabilizes, the stock may have already seen that interim bottom last Friday.

We are long with options expiring June 20 using the 1050 strike, which is now up approximately $4,700 with 10 options contracts.

Daily Chart (NFLX)