Market Overview

This Tech Strategist Said Netflix Might Be Setting Up For A 'Very Good Short'

Share:
This Tech Strategist Said Netflix Might Be Setting Up For A 'Very Good Short'
Related NFLX
Holiday Shopping and Retail Sector Impact
Disney Would Likely Trade Down On A Netflix Deal
Netflix's (NFLX) Management at UBS 44th Annual Global Media and Communications Conference Transcript (Seeking Alpha)

Sean Udall was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Quantum Trading Strategies CIO Sean Udall said on Benzinga's #PreMarket Prep that Netflix, Inc. (NASDAQ: NFLX) would "line up as a very good short at one point."

Udall pointed to the fact that "smart money" was leaving the stock as one indication that it may have peaked near-term.

On Wednesday, Carl Icahn said he sold off his entire stake in the company. Udall also pointed to Ron Baron, a growth manager, who said he was exiting his long position as well.

Related Link: Citi Downgrades Netflix, Says It's Hard To Top The 'Raging Bull'

Udall is looking for Netflix to start "cracking," with a "spikey stock chart" before he would enter a trade. Fundamentally, Udall said he thought Netflix was a fundamental short from around the $580 or $600 levels, maybe even lower. Instead, "sometimes the best thing to do is to not do anything with a stock," Udall theorized, suggesting that Netflix is in limbo at the moment.

In a word of caution, Udall said that he has purchased put spreads in the past, which have not worked out.

"Trees don't grow to the sky," Udall said, but if Netflix were a tree, "it'd be scratching the ionosphere right now."

At Wednesday's closing price of $678.61, Netflix shares had virtually doubled this year, gaining 98.7 percent.

Posted-In: Carl Icahn Netflix Quantum Trading Strategies Sean UdallShort Ideas Exclusives Tech Trading Ideas Best of Benzinga

 

Related Articles (NFLX)

View Comments and Join the Discussion!