 Welcome traders to another tick mill earnings season preview with me, Patrick Munnally, before we jump into today's report, as always, want to adhere to the risk disclaimer. And most pertinent to today's presentation is the fact that the views and opinions expressed by me are solely mine, they're not addictive or representative of those held by tick mill UK or tick mill Europe limited. Okay, let's jump into today's report. We are looking at Netflix. Netflix are set to announce earnings after the close of New York trade today. The earnings per share estimates is 55 cents on revenue of 7.86 billion. Now, I would say there is a whisper number on the street that the EPS could come in as high as 65 cents. Since its last earnings report, Netflix has continued to a decent run of share out performance on the back of investor confidence that's twin initiatives of launching an ad supported tier and cracking down on possible sharing will reignite higher levels of net revenue growth for 2023-2024. In addition, Netflix has returned to compelling content launches in the back half of 2022, after a mixture of net addition pull forward and the pandemic coupled with content production disruption. On the ad supported initiative, the market debate is really around whether the market supports the Netflix management's own narrative of crawling, walking and then running. However, we did get press reports in December that the initial response to this initiative was muted. The opportunity set for Netflix is the expectation that a host of large scale brands advertisers will adopt the offering, but its current framework of large minimum upfront commitment and the above industry pricing and limited metrics for measuring success could cap the advertising dollar opportunity, absent a wider scale of users and greater ability to measure attribution. In addition, concerns that additional subscriber offerings could cause a dial down into lower price plans by users in any potential consumer recession over the next six to 12 months also weigh on the forward outlook. On the pathway sharing initiatives, markets continue to monitor how Netflix management will actually implement and execute on such an initiative in 2023. In terms of tonight's report, there is the potential for Netflix to surprise to the upside on subscriber performance based on survey data, leaving the majority of forward subscriber estimates largely unchanged. In terms of the initiatives I've discussed, working assumption is that they act as a potential catalyst in 2023 in terms of changing that subscriber growth dynamic, but in just the last quarter, the FX landscape has shifted significantly with the US dollar performance having a start reversal and down 7% in the last quarter of last year since Netflix last reported. As such, adjustments are going to be made to the operating income estimates for the following quarters. Looking ahead into 2023, concerns around the impact of a consumer recession as well as heightened levels of competition and demand trends and margin expansion and levels of content spend and a view that Netflix is becoming a bit of a show me story with a relatively night catalyst part in the next six to 12 months on new product initiatives are all concerns for investors. Upside catalysts come in the form of the potential for subscriber growth to surprise to the upside. Price increases with a minimal churn resulting in higher operating estimates would be well received. Better than expected cost savings coupled with pricing power and a slow down on content spend resulting in higher margins versus market estimates and faster than expected execution on both that password sharing and ad supported initiative. An industry competition abating and an impact on subscriber growth and more original content and better consumer attention will all be positive for the stock. Let's jump into some of the statistical trading patterns we see around Netflix earnings. Netflix shares have actually moved lower in the immediate aftermath of earnings nine out of the 12 previous reports. On average, the stock has actually moved down next to 4.4% in the first day of trading after the company reported earnings. Based on the previous 12 earnings releases, Netflix is more likely to trade higher one day after earnings just shy of 1%. The average gain of 0.7%. On average, the stock has moved lower by 0.8% one week after earnings. Moving to the analyst community, Netflix remains a buy, is no longer a strong buy though and we are looking at a broad range here in terms of price forecast for the next 12 months. On the top side, capping out at about $405 on the downside 215 with an average of 319 as the level for the 12 months ahead. Looking at options blow and investor sentiment going into the company's earnings release has 46% expecting an earnings beat. Notable options activity has specific interest in the $325 calls expiring tomorrow Friday. However, options order flow sentiment in general has been bearish with put to call ratio currently 1 to 2, 42% calls, 58% puts. Expected move post earnings based on implied volatility gives about a 9.4% move versus an average of actual earnings move of 10.6% in recent quarters. The options market however has overestimated the Netflix stock earnings move 58% at the time given the last 12 quarters of data. Let's pull up a chart here and see if we can identify any near-term trading opportunities with respect to stock. I'm using the daily timeframe here, obviously we have this five-way decline. Last time out we were looking for a break of this congestion zone here, looking for a move through the 250 level to target 301. That move played out nicely and hit the target post last earnings. Heading into today's earnings report, let's look at some key trade levels and opportunities. So if the bearish sentiment in terms of those those about higher put ratio in the market at the moment plays out and the earnings come in in line or below expectations, I'd be looking for any pullbacks into the initial support here coming in at the 290 level. Watch here for bullish reverse patterns on the daily timeframe to engage on the long side, but I'd actually be tugging and then move up into the yearly pivot here at 354 on the upside. Also that comes in with the objective of sending trend channel resistance as well. If we don't find support in the low 290s, then I'd look for a deeper corrective move into the main trend channel support coming in at that $265 level and then prior resistance also could access support 255. So that would be another area, I'd be paying close attention on the daily timeframe looking for bullish reversal patterns again to engage on the long side, looking for that move up into our low 350s yearly pivot target. Now if as some are anticipating we could see a potential pop in subscriber growth numbers of Netflix tonight, I have actually when I was scanning the options chains noted that there was some interest in the 390 call expiring tomorrow and so if that's if we do get that upside surprise, I'd be looking for any daily close through the 350 yearly pivot to target and move up into our prior technical wave 4 high at that $400 mark and you'll remember from the analyst community that was the upper end of expectations heading into the year ahead. So I'd be looking to take some profits there if that move plays out alternatively on the downside, a really negative report would see us take out that 250 sport, I'd be deploying short positions then looking for a move back down into that 211 we will see that prior support zone before we got this recent move to the upside also now marks the high volume note there at 225 really any close below there will be a dramatically bearish development opening move back down to test the price cycle lows in the low 160s. If you have any questions or comments feel free to email me patrick dot monthly at tickmail partners.com as always trade as plan the trade trade the plan and most importantly manage your risk until next time thanks very much