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