Netflix has already seen a very strong run higher during COVID-induced lockdowns. The increase in earnings for the company has already ensured a great run higher in Netflix shares. However, the seasonal pattern still remains strong for Netflix. Over the last 10 years, the company’s shares have risen 7 times out of 10. The largest gain was in 2014 with a huge 24.51% rise. The largest loss was in 2012 when shares fell -14.86% between May 11 and June 06.

Will Netflix find gains again? Or has the company gained enough already?

Major Trade Risks:

  • Over the long term, May tends to be a weak seasonal month for stocks; however, Netflix has performed fairly well seasonally.
  • The main risk to this trade is from any risk-off tones which may pull equity markets lower.
  • Any signs of the US normalising rates will pressure Netflix lower.