Queuing Up a Netflix Play

With the huge number of earnings reports coming due, it is impossible to look at all the stocks prior to their reports -- at least from a technical standpoint. I spent some time trying to break down F5 Networks (FFIV) and simply could not get a feel for it. The stock looks like it should be a volatility play once it gets above $99 or below $95 -- with another $10 possible if that happens. However, since my bias is slightly to the upside and the stock is stuck in a fairly wide wedge, I would only consider taking a shot at the January 25 $100-$105 call spread for around $1.75. As a stock a trader, I've found that FFIV can play after the earnings report better than into the report, so I'll keep this one -- along with a certain shiny red fruit -- on the screen tomorrow.

One earnings report I will play into is Netflix (NFLX). The stock has been on a tear recently, no doubt getting some help from the 24% of the float that is short -- give or take a few percent as this is a momentum favorite. I'm starting to see some divergences in the chart pattern along with much higher expectations on a stock that has continually disappointed. Let's not forget, I don't view valuation as being on their side at the moment. NFLX is probably one of the top candidates for a lottery play. I actually believe $115 or $85 are both quite possible and I would lean toward the latter with a January 25 $95-$85-$80 skip strike put combination at $2.20 or less for my lotto ticket play....223 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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