NFLX Oversold Heading Into Earnings Report

Netflix (NASDAQ: NFLX) will announce its earnings after the close today. The stock is oversold with a PowerRatings of 8. NFLX is a volatile stock with a 100-day volatility that is almost four times greater than the volatility of PowerShares QQQ (NASDAQ: QQQ) and the earnings report could be a catalyst for a large move. NFLX has beaten analysts’ expectations in each of the past seven quarters and the stock price has moved up an average of 16.8% in the week after the earnings release.


PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.

In the past, buying stocks with a rating of 8 on a 5% pullback the next day and selling five days later has been profitable 72% of the time. The average winner has gained 3.9%. Other entries and exits also show high winning percentages and large average gains.

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All data is as of the end of day on 1/21/2014.