Boosting Profits: Beginner's Swing Trading Nets 8.14% on NFLX
Swing Trading for Beginners: Leveraging Momentum to Generate 8.14% Returns on NFLX
Swing trading is a strategy that seeks to capitalize on the inherent volatility in stock prices. It aims to capture gains from stocks within a few days to several weeks, based on changes in their momentum. A key to successful swing trading is understanding the indicators that signal the shifts in momentum, and Netflix, Inc. (NFLX) offers a compelling case study for beginners.
On July 03, 2023, the Momentum Indicator for NFLX crossed the threshold into positive territory, potentially signaling a change of pace in the stock's performance. This change of direction in momentum is a key signal for swing traders, as it can indicate the onset of an upward trend. In the context of NFLX, this could present an opportune moment for traders to consider purchasing the stock or acquiring call options, in anticipation of further gains.
The statistical strength of this strategy is also noteworthy. In a retrospective analysis of 86 similar instances where NFLX's Momentum Indicator shifted to positive, the stock price increased in 68 cases. This results in a success rate of 79%, pointing to a substantial likelihood of the stock following a similar trajectory in the aftermath of the latest momentum shift.
These statistics form the foundation for a potential 8.14% return on NFLX for swing traders. By leveraging the Momentum Indicator as an essential part of their trading strategy, they can potentially capitalize on the stock's volatility and short-term price movements, creating significant opportunities for profit.
This strategy reflects the broader concept of technical analysis in swing trading. By carefully studying the stock's past price movements and related technical indicators, such as the Momentum Indicator, traders can develop insights into potential future trends. NFLX serves as a useful example for beginners, illustrating how to leverage these tools to seize profitable trading opportunities.
NFLX's Indicator enters downward trend
The Aroon Indicator for NFLX entered a downward trend on August 29, 2023. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 159 similar instances where the Aroon Indicator formed such a pattern. In of the 159 cases the stock moved lower. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 13, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on NFLX as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for NFLX turned negative on September 13, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .
NFLX moved below its 50-day moving average on September 13, 2023 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for NFLX crossed bearishly below the 50-day moving average on September 18, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where NFLX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for NFLX's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where NFLX advanced for three days, in of 307 cases, the price rose further within the following month. The odds of a continued upward trend are .
NFLX may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. NFLX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.496) is normal, around the industry mean (4.629). P/E Ratio (41.152) is within average values for comparable stocks, (76.268). Projected Growth (PEG Ratio) (1.419) is also within normal values, averaging (1.752). Dividend Yield (0.000) settles around the average of (0.061) among similar stocks. P/S Ratio (5.429) is also within normal values, averaging (110.344).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. NFLX’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a provider of online movie rental subscription services
Industry MoviesEntertainment
NFLX and
Correlation & Price change
A.I.dvisor indicates that over the last year, NFLX has been loosely correlated with NWSA. These tickers have moved in lockstep 52% of the time. This A.I.-generated data suggests there is some statistical probability that if NFLX jumps, then NWSA could also see price increases.
| Ticker / NAME | Correlation To NFLX | 1D Price Change % | ||
|---|---|---|---|---|
| NFLX | 100% | -0.56% | ||
| NWSA - NFLX | 52% Loosely correlated | +1.27% | ||
| NWS - NFLX | 51% Loosely correlated | +1.27% | ||
| DIS - NFLX | 48% Loosely correlated | +0.21% | ||
| ROKU - NFLX | 45% Loosely correlated | +0.20% | ||
| WBD - NFLX | 40% Loosely correlated | +0.09% | ||
More | ||||