Unum Capital: Offshore Trade Ideas - Netflix Inc and Adidas AG

Unum Capital: Offshore Trade Ideas - Netflix Inc and Adidas AG

Dear Trader

Today, two trading opportunities in the offshore market present themselves:

#1. Netflix Inc.  

Along with the overall market, Netflix has rebounded strongly since late December 2018, appreciating from $233 to it’s last close of $335. The recent swing highs saw the price test the overhead resistance while also re-testing the underside of it’s 200-day moving average. The rebound saw the share trade in oversold territory, has since given a small pullback and is currently wrestling with it’s 200-day moving average. From a fundamental standpoint, the valuation appears quite lofty, with the share trading at 125 times trailing earnings, cash flows operations becoming increasingly negative, while the company’s debt to equity ticks higher. With the share price appearing vulnerable from a technical perspective and the fundamental metrics rather unappealing, traders could look to short/sell the share at currently levels. Alternatively, traders could utilize put options to take advantage of a potential downside move.

Trade Levels: 

Short/Sell Netflix above $340

Stop-loss: $352

Take Profit Target: $305

#2. Adidas AG

Following a strong year-to-date rebound, the share price of DAX-listed Sportswear and leisurewear giant Adidas may be vulnerable to a lapse of support as it re-tests it’s breakdown level as well as the overhead resistance going back to it’s all-time high peak of 218 on 28 August 2018. At it’s last close of 203.10, the price is starting to roll over from overbought territory, while the momentum indicator signals the commencement of a short term bearish trend.At current levels, traders could look to short sell the share in anticipation of a move lower.

Trade Levels: 

Short/Sell Adidas above 203

Stop-loss: 207

Take Profit Target: 188

Please chat to the Unum Capital Trading Desk to take advantage of any trading opportunities.
All the best,
Lester Davids
Unum Trading Desk Analyst
e-mail: clientservices@unum.co.za
Tel: 011 384 2923

Leave a Reply

Your email address will not be published. Required fields are marked *