Netflix may have fallen short at the Golden Globes, but one trader thinks the streaming giant's stock is about to win big heading into earnings.
Netflix, which closed trading on Tuesday at $330.75, has rallied over 2% in the early start to the year, but is up almost 8% in the last month thanks to a big rally in December. TradingAnalysis.com founder Todd Gordon says a number of forces are set to drive the stock higher, including expectations of earnings growth fueled by international expansion.
The charts are also pointing to a breakout for Netflix, says Gordon. He points to a gap that formed in July, when Netflix tanked on earnings.
According to Gordon, that gap is about to be filled, meaning Netflix is about to rally to that previous peak.
"Typically speaking, markets don't like to leave those gaps open," he said Tuesday on CNBC's "Trading Nation." That gap would be closed around $360, he added.
A resistance level also seems to have formed at around $340, he adds. Given that the stock recently touched those levels, Gordon believes it's setting up for a breakout above $340.
Gordon is eyeing a rally into Netflix earnings on Jan. 21. As a result, he wants to buy the Jan. 31 340-strike calls and sell the Jan. 31 360-strike calls for a cost of $7.33.
This means that should Netflix close below $340 on Jan. 31, Gordon would lose the $733 that he paid for the trade. But if Netflix closes above $360 on that day, Gordon could make up to $1,267.