Netflix is rocketing higher in extended trading after clearing one of its biggest hurdles

Netflix just smashed earnings estimates and is roaring higher in extended trading on Tuesday.

Its shares rocketed nearly 12 percent to $386.50 after hours.

Gina Sanchez, CEO of Chantico Global, says the surge is largely driven by Netflix's ability to overcome one of its biggest hurdles.

"Netflix was obviously able to quell the subscriber growth concern that had been haunting them in the market," Sanchez told CNBC's "Trading Nation" on Tuesday.

The streaming giant added nearly 7 million new subscribers in its third quarter and guided for as many as 9.4 million new adds from October to December. Domestic subscriber growth came in 61 percent higher than estimates, while international growth topped forecasts by more than 1 million.

However, another one of investors' concerns is still hanging over the company, says Sanchez.

"They actually have some pretty significant debt needs, debt financing needs, going into a higher interest rate cycle," said Sanchez. "Are they going to continue to go fuel those massive expenses with debt? ... I think that's what they need to clarify in their earnings report."

Before the earnings release, Todd Gordon, founder of TradingAnalysis.com, laid out Netflix's technical vulnerabilities. He said a break below $320 could breach key technical support and instigate a swift move to levels not seen since sell-offs in February.

"If we break, I think you do have the opportunity to get down to about the $250 mark. That's where technical support comes in, sourced all the way back to that 2015 uptrend line, so near-term I think it's vulnerable," said Gordon on "Trading Nation" Tuesday.

Netflix first broke through $250 at the beginning of the year, briefly fell below it in February, and then surged to new highs over the summer. It is currently a 27 percent drop away from $250.

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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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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