Possible arbitrage play?

[jiesen]

Buy BBI, short NFLX.

http://finance.yahoo.com/q/bc?s=BBI&t=5y&l=on&z=m&q=l&c=NFLX

Blockbuster will reap what Netflix has sown. It's out of favor now, but BBI will be back. Blockbuster isn't just some fly-by-night Krispy Kreme outfit, you know.

Also, you can't patent the novel concept of mailing a product to someone and asking them to return it to you.

It's just an idea- all opinions welcome on this one.

[New-born baby]

Bbi/nflx

It isn't something that I want to do because neither chart is ripe. I have finally come to the place that I want a chart that is ready to pop today, and not next month, or six months from now, because I want my capitol working for me today. The worse thing I can do is lose money; the next worse thing is to let my money just sit there when it could be turning me a good profit. And not investing my money pays me 6% interest with Interactive Brokers. So finding a ripe winner has become imperative, or else I want to let the sleeping stock lie.

BBI: pretty sick company. The chart has put in a series of successively lower lows and lower highs. This last rebound has brought the high back to the place of the last high. This is indicative of a stock making a reverse head and shoulders, but right now has not put in the right shoulder. In other words, she is headed to $3.60 again, and that is the place to enter if you want this stock. If she breaks $4.20 she could move up some. Still--pretty weak chart--and lots and lots of overhead resistance will impede its progress if it can ever turn it around. Let's find a healthier stock to take long--maybe NFLX?

NFLX: Rhe weekly--not something you want to short just now. "Cup with handle." IF this thing busts the $30 resistance, it looks set to run up to $50 (1st target: $35 2nd target:$50).

[jiesen]

Thanks for the input, NBB. Maybe it's a good idea to wait for the charts to "ripen" before making this play, but because this is really a long-term fundamental play on the value of BBI vs NFLX, what are some fundamental reasons (if any) you wouldn't buy BBI and short NFLX to exploit this inefficiency?

Also, the Chinese have a saying, "qi ma kan ma", which means that while you're riding one horse, you should always be keeping an eye out for the next horse you want to be on.

[New-born baby]

????

Thanks for the input, NBB. Maybe it's a good idea to wait for the charts to "ripen" before making this play, but because this is really a long-term fundamental play on the value of BBI vs NFLX, what are some fundamental reasons (if any) you wouldn't buy BBI and short NFLX to exploit this inefficiency?

Also, the Chinese have a saying, "qi ma kan ma", which means that while you're riding one horse, you should always be keeping an eye out for the next horse you want to be on.

Jiesen,
I know nothing about the fundamentals of either stock. I just look at charts. So I cannot tell you any fundamental reasons not to buy/short these stocks.

MFLX--suggest you sell for a profit now and re-enter later. Head and shoulders have formed.

NFLX--if it busts $30 on volume, I'd buy this one