Netflix Inc. (NFLX)

[iam802]

With NFLX breaking the kumo support and subsequently breaking down from the magical 100 level, it is now time to watch out for possible support levels.

On the Ichimoku chart, we can identified 2 immediate support levels from the Chikou Span.

1. Support at around 95

2. Support at around 90

The support at 90 will be a critical support as that is the level where it gaps up back in April.

Breaking the 90 level, will send it down to the 70s and perhaps even 50.

[iam802]

Morgan Stanley upgrades NFLX

http://blogs.barrons.com/techtraderdail ... hoobarrons

Neflix (NFLX) shares are getting an early lift Friday from Morgan Stanley analyst Scott Devitt, who this morning raised his rating on the stock to Overweight from Equal Weight.

Devitt offers three basic reasons for his more optimistic stance:

The recent stock price decline “is unwarranted.” He notes that the stock is off 18% since the company’s July 21 earnings report on higher-than-expected subscriber acquisition costs, a sequential increase in churn and lower ARPU.

He writes that he has “higher conviction” that the company will outperform expectations on subscribers, operating margins and EPS.

He is “increasingly optimistic” about the the company’s “long-term opportunity” due to an increasing addressable market and margin upside. “Investment in digital has significantly increased Netflix’s consumer value proposition,” he writes.

Devitt calculates fair value on the stock as $140.

NFLX in early trading is up $1.58, or 1.6%, to $99.60.

The lucky thing is I took my profit off NFLX yesterday.

[iam802]

Having break kumo support couple of days back on July 28, NFLX is now making an attempt to turn the trend around.

Part of this rally is made by calls from Morgan Stanley and Piper Jaffray that NFLX will hit a target price of $140.

On my part, I will admit that I do not know what are the fundamentals of NFLX.

My reading of the Ichimoku chart for NFLX is still bearish.

Let’s take a look at the chart.



1. We can see that currently NFLX has rebounded from the lows of 95; as highlighted in the possible support levels to watch.

2. More importantly, we can see that NFLX is now expected to hit the kumo resistance soon at around $105

3. We can also see more resistance form by both the Tenkan sen and Kijun sen at around $109 which happens to be where the gap is. If you think of the Tenkan sen and Kijun sen as a form of moving average, then we can easily infer that the resistance at 109 will be very high.

4. Next, I want to point you to the edge of the chart which I have highlighted with the words ‘kumo twist’. In short, the leading kumo at the edge has confirmed that the trend has changed. The key word is changed; not ‘changing’. It is often very difficult for a trend to change. But, when the trend change, it is difficult to change it back again.

5. Putting all these together, we have :
- Kumo resistance at 105
- Tenkan sen and Kijun sen at 109
- Kumo twist

I have a simplistic view of NFLX vs other counters that is above $100. The key word is easy reach to customers. For a company that revolves around consumer adoption, I would like to compare them to AAPL and AMZN.

When the above 2 goes above $100, we know it is because they have build a moat and their products and services are used by consumers worldwide.

However, I cannot assume that is true for NFLX. Currently, its success seems to be confine within US itself (the growing subscriber base).

I do not have answers to their future growth. However, I do have questions in mind:

1. What is the cost of acquiring content for global distribution? Off my mind, I think it is very difficult to achieve this. Media companies are well known to be very edgy over territorial rights and distribution issues. Without their cooperation, their growth is hampered.

2. Outside of US, what will be their perceived next biggest market? Will it just be Canada? Germany, where the language is different? UK? Or will it be China (where piracy is high and they already have alternatives FREE streaming services and products?

3. Regulations and other issues. Remember Google and the issues they face in China? How about RIMM and the challenges in India and now Middle East? There are some issues that can be solved easily and there are some that may not be solved? Content consumption and censorship is one of them.

4. In other words, I see the cost of expansion to be increasing even if NFLX choose to license their infrastructure to partners overseas. While costs increases, I don’t see the cost of subscription going up either. NFLX subscription model is like subscribing to cable.

5. Competition. I have mentioned it before and I will highlight it again. What is stopping Apple and even Amazon from going into this business?

6. Until NFLX, comes out with more positive news, for example news on market development, I will take the analysts report with a pinch of salt at this moment.

[iam802]

Major indices are moving up today.

However, we are seeing a possible retracement on NFLX.

On the 5 minute chart, a letter ‘h’ is forming again; similar to the one on July 29.

The only difference is this time the kumo resistance is nearer (even on the 5 minute chart) and it is fairly thick which suggest heavy resistance ahead.

A break below 101.70 could see the beginning of a drop again for NFLX.

[iam802]

Netflix is a good example that if I trade based on my beliefs, I will be losing quite a fair bit of money by now.

NFLX just announced that it has entered into an exclusive agreement with EPIX for their media library for distribution via the Internet. That itself is a good example of NFLX market leadership despite my view that it will face problems growing outside of US.

However, just because I have a bias doesn’t means the market will react according to my views.

And in fact, the saving grace for me is I stopped my short when NFLX rebounded off $95.

I tried to look for good short entry near the kumo resistance level on the daily chart but NFLX bullish move is extremely strong and bulldoze all the way up and just today alone, it was up more than 7% on the news.

The strong bullish momentum save the day (for myself). If the momentum has been weak and it has shown signs of slowing down or reversing when it hits the kumo resistance, this positive news will have a huge impact on my positions.

I consider this a blessing in disguise and a reminder to trade what you see. Sometimes, we hold on to our views for far too long without accepting that things have change. Imagine the damage done if I have continue to short NFLX at every resistance level!

Again a reminder: Wait for the setup. No SETUP, No TRADE!

Note:

Having said that, NFLX is back near its 52 week high. Watch the chart and act accordingly.

[kennynah]

bro....forget it....not worth your time...

many other tickers you can very easily make money from.... sometimes, we sabo ourselves unwittingly...


eg, wheat....no need to follow so closely.... happen to notice...make a quick decision....enter the trade... and probably make more money faster than a ticker you've been following for a year....

my point is.... see open...

i used to be very narrow ... until i realize.... opportunities abandon man...who cares what people say...no FA. no TA...duno anything.... bcos, at the end.... you have that profits in your bank...who cares what ah ter, ah gow, john and templeton says....

[millionairemind]

August 10, 2010, 8:13 AM
Netflix to Stream Films From Paramount, Lions Gate, MGM
By BRIAN STELTER
http://mediadecoder.blogs.nytimes.com/2 ... f=business

[profittaker]

read that it is a five-year deal, with 3 month window.

NFLX just announced that it has entered into an exclusive agreement with EPIX for their media library for distribution via the Internet.

Zacks Analyst Blog Highlights: Netflix, Walt Disney, Sony, Blockbuster and Coinstar
http://www.pr-inside.com/zacks-analyst- ... 992767.htm

[iam802]

Devil is in the details.

New releases from some studios are not included in the licensing agreement.

In other words, cost goes up.

http://www.benzinga.com/analyst-ratings ... isguided-n

UBS Investment Research is out with a report today reiterating its Sell rating and $90 price target on Netflix (NASDAQ: NFLX) as the recent news with Epix is being misinterpreted the investment bank said.

The Swiss bank states that the deal will lack new releases and large Dreamworks (NYSE: DWA) deals such as Shrek due to those being part of separate negotiations. It also believes the cost of goods will offset any Epix revenues.

[winston]

Dont understand why you would pay for a movie at Netflix when you can get it free on so many websites ..

CHART OF THE WEEK: A CLASSIC PETER LYNCH WINNER

Our chart of the week displays that, in addition to tobacco companies, another business has shrugged off the recent market weakness and terrible job numbers.

That business is home movie rentals. Specifically, home movie rentals from Netflix (NFLX).

Netflix strikes us as a classic "Peter Lynch stock." The phenomenally successful money manager Lynch became famous for his love of investing in companies that earned the loyalty of friends and family. These days, most people we know are huge fans of Netflix and its easy-to-use red envelopes. We count ourselves as users. Ordering The Good, the Bad, and the Ugly online beats standing beside a smelly guy at Blockbuster.

As you can see from our chart of the week, this easy-to-use business is soaring right now. Revenue for the most recent quarter rose 27% from the same time period one year ago. The stock is up from $40 per share last summer to $130 today… and it's one of the few stocks able to strike a new 52-week high amid this week's huge selling pressure.

www.dailywealth.com