Over the past three years, no single stock has flummoxed traders like Netflix (Nasdaq: NFLX). Everyone – from professional traders to analysts to casual market observers – was stunned by how resilient Netflix was to market pullbacks.
And they had good reason.
Shares of Netflix rose from $19 in 2008 to over $300 by 2011, a rise that made early investors nearly 15-times their original investment. And that impressive gain came without any prolonged pullback. The major move also occurred even despite several downgrades by analysts.
Before main-street analysts were right about Netflix’s valuation (more on that in a minute), shares defied gravity. Well-known investment firms had "Sell" ratings on the stock despite a rally from $60 to $300 in just one year.
Wedbush labeled the stock as garbage, and maintained an $80 target price despite the fact that the stock was trading at over $200 at the time.
Of course, in typical stubborn analyst style, they couldn’t downgrade shares of NFLX while the stock continued to rise. Finally, in March and April Canaccord, Oppenheimer, UBS and Morgan Keegan each gave Netflix two thumbs up.
And each brokerage house increased their share price targets, some to as high as $360.
That moment was exactly when investors should have sold Netflix. Since July, shares have fallen down to $81, right around Wedbush’s target. Looks like they were right on with their original target…
A big miss in third quarter financials took the stock from $120 to $75 overnight. And after such a huge decline in price, many investors may be asking whether right now is an ideal time to buy Netflix shares.
Today I share with you a video with my complete analysis of the Netflix chart. I hope this video helps answer your questions about whether now is the right time to buy NFLX shares, whether the stock is bottomed, and the potential upside from here.
Research Analyst, Trademaster Daily Stock Alerts
Editor’s Note: Jason’s stock trading service, Trademaster Daily Stock Alerts, is having another banner year with recent gains like 20 percent on SYNA and 20 percent on SKF. You can learn more about how to profit from short term moves of individual stocks by clicking here.