Bull & Bear: Netflix Inc. (NFLX)

Shares of Netflix, Inc. NFLX are trading higher on the session by 0.09%, currently at $229.03. The stock is trading just $18.00 off of its 52-week high, where will it go from here? Bulls: The bulls will note that Netflix has 20-day, 50-day, and 200-day moving averages that are all uptrending. Though shares recently has a hiccup and breeched the 50-day, it was regained quickly and shares have rallied off of the level. There seems little in the way of Netflix testing its recent highs. A bullish trade could consider buying the May 2011 $245/265/310 call tree for a net debit of $4.65, or 2.03% of shares. Max gain on the trade is $15.35 (+330%), when shares trade between $265 and $310. Bears: Bears will note that shares are trading well above the 200-day moving average and are due for a mean retracement. They will also cite the fact that shares are heavily in overbought territory. A bear might also note that recently many competitors have started to gun at Netflix in an attempt to steal the steaming content business from them. A bear would consider buying the June 2011 $225/175 put spread for a net debit of $15.15 or 6.61% of shares. Max gain is $34.85 (+230%), when shares trade south of $175.00. Netflix, Inc. is a subscription service streaming movies and television episodes over the Internet and sending digital versatile discs by mail to more than 12 million subscribers. The company's subscribers can watch unlimited movies and television episodes streamed to their televisions and computers, and can receive DVDs delivered to their homes. The company offers a variety of subscription plans, with no due dates, no late fees, no shipping fees and no pay-per-view fees. Subscribers can select from a library of titles that can be watched and a range of titles on DVD. On average, approximately two million discs are shipped daily from the company's distribution centers across the United States. In September 2010, the company launched Canadian service for streaming movies and television episodes over Internet.