¶ Analyzing Netflix's Predicted Crash
This is week one of Like Folio's earnings season and it has gotten off with a bang. Netflix moving drastically lower this morning. As we predicted. And I've also got a play for you on Tesla going into earnings. after the market closes today. So earnings season fully underway and we are ready to roll. First I'm gonna start off by sharing with you Video from last week where we previewed test a significant shift in consumer sentiment, at least for a brief period during this cancel Netflix phase.
I think it was Elon Musk that kicked it off and it was really jumping around the internet. A lot of people did it. It looks like that's mostly faded away. We're not sure exactly how important it's gonna be. It's definitely gonna be a negative. So we're bearish on Netflix again this quarter. So bearish again on Netflix this quarter. Here's what the earnings sheet at Lightfolio looked like.
Negative 34 earnings score, which is moderately bearish due to weakening demand growth, weakening happiness growth. And we suggested a coin flip bearish trade, which is our pretty textbook style bearish trade where we use some options to really limit risk and maximize gains. You can see our notes. Web visits down 15% year over year, signaled demand slowdown and persistent user growth weakness. The stock.
Cooperated beautifully for us, down a hundred plus dollars today, nearly ten percent, giving us a nice profitable trade to start earnings season.
¶ Tesla's Bullish Outlook And Trade
As we look forward, we've also got Tesla this week. We love trading Tesla. It's one of our favorite stocks to trade. Here's what the earnings sheet from Likefolio looks like on Tesla going into this report. As you can see, a plus 37. So pretty much the flip side of the Netflix score. It's not an enormously high score. It's moderately bullish.
The scores go from negative 100 as the most bearish. Zero is neutral. Plus 100 is the most bullish. So plus 37 is nicely bullish on Tesla. The reason that we're bullish on Tesla, web visits up 10%. year over year and that demand seems to be accelerating and it's not just The E V credit. that are doing it. We've watched here into October remaining very strong. And we think Tesla have a very good reason to put out bullish guidance. We think there's a continued rebound from the brand.
after the shenanigans and nonsense earlier this year where every Tesla on the street was in danger of being vandalized or set on fire because of the ridiculous political terrorism. We're bullish on Tesla going into earnings. When I look at the stock over the past year. After it hit the Tim Wall's bottom in March around 220, something like that, 225, doubled from there. And now we're at a point where I really think if Big if, if Tesla can put together a great quarter and great outlook here.
You've got a chance that the stock moves to new 52-week highs and could really break out. From here. That'd have to get above 488 into the 500s. I'm not sure if that's really in the cards this time, but. We're going to take a shot bullish with defined risk. If you want to know how we do this, you should join our free newsletter. Just go to likefolio.com or hit that QR code in the top left.
We continually educate people with our free daily newsletter on how to trade earnings, how we trade these spreads, to define risk very clearly and maximize potential return.
¶ Effective Earnings Trading Strategies
I want to be clear on these earnings trades. We don't bat a hundred percent on these. We don't bat ninety percent. That's not even the goal. Our goal is to get an edge like the house has in blackjack, fifty-five percent, sixty percent wins on earnings trades with defined risk, clear. Profit potential that is beyond a double. Win more than you lose. And when you win, win more than you risk.
That's the strategy on earnings. I'm not just buying the stock and hoping that it shoots higher. I'm using very, very carefully selected leverage and risk control. Earnings seasons under what? It's not gonna come down to two trades. Netflix gave us a great start. Tesla tonight, we'll see how that goes. Hopefully they move to the upside over the rest of the week and we can get two nice wins in our pocket in week one. But earnings season is ten weeks long. We got a lot of trades coming up.
next week. So again, join the free list. We'd love to have you on. And thank you for joining me today. Let me know what stocks you're looking at going into earnings. Hit me up. Andy at likefolio.com or at Andy Swan on X.