Don’t look now, but a momentum darling of yore — Netflix (NASDAQ:NFLX) — is beginning to show some signs of life.

Click to Enlarge The recent influx of buyers drove the beleaguered media company back above its pivotal 50-day moving average. With the short-term trend now rising, bullish plays are worth a look.

From a charting perspective, NFLX is forming a clean, high base in the $80-$85 zone. The past few days of sideways churn have allowed the stock to digest the sizable gains accumulated in its most recent upswing. A break over $85 might signal yet another up-leg.

With earnings looming a short two weeks away (on July 24), implied volatility has seen a notable rise during the past month from under 50% to north of 70%.

Because options appear to be priced a bit rich, traders probably would be better off entering some type of spread versus buying options outright. Given the uncertainty associated with the upcoming earnings release, it also would be prudent to exit any short-term positions before July 24.

One strategy worth consideration — if NFLX is able to muster the strength to break above $85 — is purchasing a bull call spread.

For example, traders could enter the Aug 85-95 bull call spread by buying to open the Aug 85 call while selling to open the Aug 95 call. The maximum risk is limited to the initial debit paid, while the max reward is limited to the distance between strikes minus the initial debit. If the Aug 85-95 call spread were purchased around $3.50, the max risk would be limited to $350 while the max reward would be capped at $650.

Regardless of how the position progresses in the coming weeks, traders unwilling to roll the dice on earnings should exit before July 24.

As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities.