"Netflix killer" is a term we seem to hear every few months.
Every time a new streaming service debuts on an existing or new set-top box, the analysts start talking about the possibility that the upstart could give the king of streaming the ultimate run for its money.
Amazon Prime, Apple TV, CBS All Access - at one time or another, they've all been held up as "the one" to finally dethrone Netflix Inc. (NASDAQ: NFLX).
So far, Netflix has subscriber growth issues and rising content costs to worry about, rather than falling to a hungry new content streamer.
But "the one" to knock Netflix down a peg or two may finally be here.
And funnily enough, analysts don't have a clue about this. Maybe they've been burned by their other predictions, but they're not keeping their eye on the ball here.
There's serious cash to be made here, and not just as a long-term investment, either.
See, the "Netflix killer" is reporting earnings TODAY, and the play I'm going to show you could very well double your money by the time Wall Street figures out they blew it...
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Disney Throws Its Weight into a Lucrative Game
Walt Disney Co. (NYSE: DIS), the $241 billion entertainment empire, has been on a media and market tear since last month.
The Mouse is moving into one of the biggest, richest markets in the world: content streaming.
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And it plans to do so with its new platform, Disney Plus (Disney+).
Following the mid-April announcement, the stock popped by double digits, hitting consistent all-time highs up to $139 (after spending the last four years in a range between $100 and $120). It's now trading at $134, having been swept up in global trade fears that have little to nothing to do with Disney's business.
Maybe they're once-bitten, twice shy, but Wall Street pundits are skeptical this time, warning that the future isn't looking as bright for Disney.
I don't think that's the case at all, for one simple (cheap) reason...
Disney+ will run much like Netflix, filled with hundreds of hours of TV and movies curated from Disney's vast archive, including old-school family favorites like "Bambi" and "Snow White," countless Disney television shows, and also from cool properties like Star Wars and the Marvel Cinematic Universe.
And Disney+ promises to do all this for the low price of $6.99 a month - less than half of what a Netflix premium membership costs, and around $3 per month cheaper than Amazon.com Inc.'s (NASDAQ: AMZN) Prime video service.
This cost shocked the room and had investors buzzing at the service looking like a complete bargain compared to other entertainment options.
That, folks, is why the stock popped double digits after the announcement - and why I think, from a competitive standpoint, Disney has a real shot at becoming king of the content streaming hill.
Now, it's true Disney is a little late to the party - it's going to have to hustle to catch up with and surpass Netflix's 139 million-strong subscriber base - but the words "Star Wars" and "Marvel" alone tell you all you need to know about the heavy profit firepower the Mouse is packing.
The pressure will be on Netflix to keep generating great content subscribers want - but remember, that's also one of Netflix's biggest expenditures.
Now, let's take a look at the firepower DIS shares are packing...
This Chart Is Almost as Exciting as Avengers
As a buy-and-hold proposition, Disney's not bad. And I expect the stock to make another healthy move upward after it reports earnings today.
As profitable as that can be, it's still not the best way to make money these days...
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If you look at the chart below, you can see that the stock has gapped higher on massive volume. Traders like me call this a "runaway gap."
A runaway gap occurs during a strong bullish or bearish movement, characterized by a significant change in price in the direction of a trend. And the latest price move after the runaway gap tells me DIS is beautifully poised to move higher.
My Money Calendar, which crunches 10 years' worth of price data on the 250 best stocks on U.S. markets, is telling me Disney has gone up some 90% of the time when faced with a setup like the one you see above.
This calls for some easy options trades. I'll give very specific instructions, with ticker symbols, strike prices, and get-in/cash-out alerts to my subscribers, but anyone can make money on this setup.
You could buy near-term, at- or in-the-money calls, dating out about a month or so. Or you could play it more conservatively with a call spread, where you buy two call options with different strike prices expiring at the same time. You tightly limit your downside risk this way, but you're also looking at smaller gain potential.
Do make sure you're comfortable with the amount of money you're putting up. In my paid trading research services, I like to stick with trades that cost no more than $500 or so, so that if a trade doesn't move my way, I can eat the loss and move on.
In either case, though, you'll likely be sitting on some tasty profits by the time Wall Street's skittish analysts realize they've blown one of the biggest calls of 2019.
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About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.