Netflix, Inc. – Common is now under Algo Engine sell conditions. NFLX was in our NASDAQ and S&P model portfolios since June 2019. The recent switch to sell signals resulted in the holding being sold for a 53% gain after a 752-day holding period.
Netflix is due to report earnings on July 20. Our sector preference is Disney.
Disney was added to the S&P model in February 2018 and has since increased 72%.
Shares of Facebook, Amazon, Netflix and Google (also known as the FANG stocks) all fell over 3% today as investors pulled money out of the overheated US Tech sector.
The FANG stocks have been market leaders all year and have accounted for over 40% of the NASDAQ gains year-to-date. On a valuation basis, these names have added over $600 billion to the S&P 500 even though they only make up 13% of the index.
Many analysts have been expecting a pullback in the tech sector as P/E ratios and forward guidance data have approached the levels last seen prior to the 2000 and 2008 market corrections.
It’s worth noting as a point of reference that Microsoft, which is not a FANG stock, fell 62% after the 2000 tech bubble burst and dropped 45.5% during the financial crisis in 2008.
Even after today’s sharp decline, the S&P tech sector is still up over 18% for the year.
They reported earnings of 12 cents a share, which double analysts estimates of 6 cents a share as revenue for the quarter climbed to $2.16 billion from $1.58 billion during the same time last year. The company attributed the strong earnings to a popular schedule of original programming.
Now that the technical price level of $117.00 has been cleared, the next key price target will be $131.00; the all-time high posted in December 2015.
Netflix (NFLX.NAS)
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