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Netflix is acting ‘very feisty’ against one key level, but all-time highs are on the way

Streaming giant Netflix is on its way to making new highs, but it needs to crack one key level first, according to TradingAnalysis.com founder Todd Gordon.

"Netflix is acting very feisty up around this $340 level," Gordon said Tuesday on CNBC's "Trading Nation." He expects the stock to break above that level soon and soar to uncharted territory. Here are his reasons why:

— The $340 level marks consolidation at the end part of a "beautiful uptrend" that has been in place. Not only that, but the stock has risen to close to that $340 a few times, only to fall back and retest again.

— Gordon noted that call option open interest has exploded in the stock.

— As a result, Gordon wants to buy the June monthly 340-strike call and sell the June monthly 350-strike call for a total of $3.04, or $304 per options spread.

— If Netflix closes below $340 on June 15 expiration, Gordon would lose the $304 he paid for the trade. But if Netflix were to close above $350, then Gordon could make up to $696.

The trade: Gordon is suggesting buying the June monthly 340/350 call spread for $3.04, or $304 per options spread.

Bottom line: Gordon believes that $340 is a support level from which Netflix can rally to new highs.

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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.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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