As Netflix Gets Ready For Earnings, Here's What Options Market Indicates About The Stock

Netflix Inc NFLX is scheduled to report its first quarter earnings on Tuesday. The streaming giant is expected to post revenue of $8.17 billion in the first quarter, according to data from Benzinga Pro. The company is expected to post earnings per share of $2.85.

The stock has gone through bouts of volatility this year. After breaching the $367 mark in January, the stock fell all the way below the $293-level in March, only to rise back above the $348-level in early April.

Also Read: How To Buy Netflix (NFLX) Stock

As the streaming giant prepares to announce its earnings, here's a look at how professional traders are factoring-in crucial support and resistance levels for the stock:

1. Resistance: Shares of Netflix closed 1.75% lower on Monday at $332.72. Options expiring on Friday indicate a fair open interest accumulation at the $340-mark amongst out-of-the-money Call strikes, at the time of writing. However, the lacklustre figure could be possibly indicating an absence of conviction on a particular resistance level in the short term.

The daily candlestick pattern of Netflix stock, as shown below by the chart available on Benzinga Pro, indicates the $349 mark remains a key short-term hurdle and only a confident rally beyond this mark could take the stock to the next resistance level that lies close to the $370-level.

Source: Benzinga Pro

2. Support: On the downside, significant open interest accumulation could be seen at the $310-mark amongst out-of-the-money Put strikes expiring on Friday. This indicates professional traders could be factoring-in this level as a potential support for the near term.

It is noteworthy that open interest data only provides a fair idea about supports and resistances. A major corporate news or a macro event could lead to huge movement in stock prices and a subsequent shift in open interest levels.

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