The U.S. stock market is on track for a weekly win ahead of the long holiday weekend, and the S&P 500 Index (SPX) could seen even bigger gains during Christmas week, if history is any guide. And while this pair of real estate stocks tends to outperform alongside the SPX, streaming name Netflix, Inc. (NASDAQ:NFLX) is one of the worst stocks to own during the week of Christmas. Here’s a closer look at NFLX ahead of the historically tough time.
According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, NFLX stock has averaged a Christmas week loss of 0.3% over the past 10 years. While the magnitude of this loss isn’t all that convincing, it is worth noting that Netflix has only turned in three positive Christmas week performances since 2007. If past is precedent, this would have the stock turning in its first back-to-back weekly losses since August.
At last check, Netflix stock was trading down 0.2% at $188.49, bringing its week-to-date loss to 1%. And while the security remains a long-term outperformer — NFLX is up 52.5% year-to-date, more than double that of the SPX — it’s pulled back from its Oct. 17 record high of $204.38, and is now sandwiched between support at its 120-day moving average and resistance at its 30-day trendline.
Despite the stock’s longer-term gains, NFLX call options are extremely cheap at the moment relative to their put counterparts, per its 30-day implied volatility skew of 11.9% — in the 96th annual percentile. Plus, the equity’s Schaeffer’s Volatility Index (SVI) of 24% ranks in the 8th annual percentile, meaning low volatility expectations are being priced into near-term contracts.
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