Netflix bottomed at $340. Buy before the earnings call?

Netflix Inc. (NASDAQ:NFLX) closed at $341.13 last week. The company is set to announce Q1 earnings on Tuesday 19^th April. We think that Netflix is set for a wild rally. To profit, you must invest before the earnings release.

The earnings call for Netflix comes at a time when the business experiences hammering on subscription rates. As a result, the streaming giant faces pressure on its revenues. The company has in the past few weeks put in place measures that would grow subscription rates. The impact of those moves may begin showing in tomorrow’s earnings release.

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Netflix may be expected to report no growth in earnings per share. That said, what investors will be looking for is whether the firm beats analyst expectations. Given the strategies that the company continues to adopt in management of subscriptions, it is probable. Beating expectations would strengthen the momentum that has already built up on the stock. Positive earnings are the sole reason why investors will troop back to the stock.

Netflix will pivot a wild rally at the $340 support level

Netflix has bottomed at $340. The stock has held this support level for six weeks. It is therefore unlikely that the stock will sink any lower. Instead, the RSI of 29.58 just signaled that it was certainly time to buy the oversold stock. Netflix has been at the oversold indicator since January. We project that the earnings release will be the signal that brings the company into investors’ watch lists. The key beneficiaries of this valuation will be the early birds before earnings.

Summary

Netflix is a strong buy before the earnings release. The stock is wildly discounted at $341. If the earnings beat analyst expectations, then the stock will be on a wild rally to the moon.

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