Options Corner: NFLX Upgraded Near 52-Week Lows

shares are down more than 40% year o year. It's time for Options Corner. Joining us now to tak us through deeper look here is Rick Ducat, lead market technician for the Sc Network. Talk to us about the Netflix chart. A painful one for investors over the last year. Yes to be sure. Down about 42% 43% during the past year. If we pull up our chart, we can see that Netflix will be the purple line on our chart versus the communications sector. TheLC ETF down 6.2% and really kind o Netflix, Google, Alphabet and Meta are what, you know, the major parts of this communications sector as well. But to compare them to more direct competitors here, we can see that really kind of surprisingly, perhaps Roku is the standout name here. Paramount Skydance. It's a arch rival in the battle for Warner Bros. Discovery seeming to, you know, both being kind of a similar situation at this point. Now to look at Netflix more specifically, we can see that we've had a uptrend off of our t trend has been broken. We now have a downward s channel type shape between our two white. After we topped out at our red line near 84 traveling downward from there, we had a relative high at 81 and gap opened up around 70. Meanwhile, our first green l represents our relative lows that we had established after our gap to the downside at 70. And then our second green line, 6508, those 52 week lows. So next we can see tha our five day exponential moving average in dark blue is closest moving average. Thas in at 7113. We are that. Our trend line lines up with our 21 day EMA in teal. That represents one month of trading here, that about 75 so. So that could be another area to watch o as we have a confluence of those two things lining up together. Our RSI study, measure of momentum trending downward below the 50 mid line still remaining above the 30 threshold. That would represent a move into the oversold area. So that would be a f bearish signal to look out for,ially if we start making too much progress beyond our our recent lows near 70. That could suggest The celebration of trend to t downside and a further push toward those 52 week lows. So next we have our volume profile study. This one shows wheree have our heavy tra activity. You can also see on our lower study there that we have a large volume spike lining up with our recent gap downward. So heavy trading volume onig moves often is suggestive of heavy conviction on the part of traders here. So it further credence to this downward move. So our volumeproe a node between to about 70 or so. So this is a heavier trad activity at theseer levels. We also had about 72 to 78 or so. Kind of two larger spikes within that range here. So those would be areas to watch for potential console activity to t upside. They're still kind of struggling here to recapture some of this footing here. It was looking like things were perhaps making a turn to the upside after we had earnings and after this whole mergering e pretty much back to those those 52 week lows at this point. Alex I know you got anmple trade you were looking at he ahead of the open. How does that tie in. Sure. So if we could lo then at our expected move picture here by the end of the week plus or minus about 3% here. That's ourll orange bo But our yellow box, our monthly expiration August 16th plus or -6% is what we're going to focus on for our example trade today. So our trade minus 1st October 16th 7065 put vertical at a 180 credit here a neutral to bullish outlook only 17 days to expiration. So a shorter term trade.ur max profit is our credit received $180. Our max loss is 320 here. So roughly a not quite one 1 to 2 in terms of reward to risk. But around that general idea. So expected move as I said about% break even 6820 about 2.6% to the downside here. So our even is, is well within that range here, but we would be looking more a, you know, just kind of price to stay above some these, these lows that we established here and n get too far close or too much closer to those 52 week lows that we established within the past quarter or Rick Duquette, there's always a pleasure. Thanks for joining us,