This post was originally written on May 31, 2013 at http://www.optiontiger.com/netflix-added-to-nasdaq-100/
In an uncharacteristic mid-season move, Netflix (NASDAQ:NFLX) will become the newest member of the Nasdaq-100 on June 6th. NFLX will be replacing Perrigo (NASDAQ:PRGO). NFLX has had a great year so far. The stock is at $225 with a market cap of $12B.
In general, getting added to the Index is a bullish sign for the stock, because various mutual funds, ETFs and an assorted array of fund managers will have to buy the stock. This is due to their fund charter if they are technology focused, and these funds are required to mirror the index holdings.
However, in this case, the index that is impacted is the Nasdaq-100 (NDX). The NDX is not considered a broad-based index like the S&P 500 due its somewhat narrow focus on technology and biotech stocks. Regardless, NFLX should see good bullish activity, at least until the next earnings report. The switch happens on June 6th.
Here is a 12-month chart of NFLX. The stock has gone up over 100% just in 2013 itself.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.