×

This stock has doubled—and more gains could be ahead

Although the S&P 500 has risen about 1 percent for the year, two stocks within the index have more than doubled — Netflix and Amazon, up 156 percent and 116 percent, respectively. And according to one technician, there's still more room to run for one of these highly prized names.

Todd Gordon of TradingAnalysis.com said Wednesday that Netflix, having broken through a key level of $115, is primed to return to old highs at $130.

"Though I love the Amazon chart, it's straight ahead, there's nowhere to define where you're wrong in the trade. That's not the case in Netflix. If you look at the Netflix chart, there's a very clearly defined point of decision around $115.75," Gordon said on CNBC's "Trading Nation."


A move to $130 would be another 4 percent rise from where Netflix traded midday Monday.

Read MoreYield of dreams: The 3 stocks that yield more than 8 percent

However, "an investor looking at these equities has to be in it for the long term and have some appetite for risk," said Albert Brenner of People's United Bank, also on "Trading Nation."

While Netflix and Amazon have had great gains this year, Brenner said investors should consider the high price-earnings ratios of the stocks.

"If you ask yourself what would have to happen to the company over the longer term, just to get that multiple back down to say a multiple of 35, you're looking at either a growth in revenue of 10 times or some major changes in terms of margins."

According to FactSet, Netflix has a trailing P/E ratio of 332 times past earnings, and Amazon has a P/E ratio of 974 times earnings.

Want to be a part of the Trading Nation? If you'd like to call into our live Wednesday show, email your name, number and a question to TradingNation@cnbc.com

Videos

Trades to Watch

Trader Bios

About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

Read more

Connect