Netflix (NFLX: sentiment, chart, options) shares are mildly lower after Thomas Wiesel downgraded the stock from "overweight" to "market weight." Additionally, Wiesel slashed its price target on NFLX from $40 to $35. In a note to clients, the broker said, "Despite the positive long-term outlook for Netflix, the volatility of the stock and the optimism baked into consensus make us step to the sidelines for the moment and look for a more attractive entry price to recommend the shares."

Specifically, Wiesel analysts believe that the market has already priced in the upside from NFLX's new streaming-video feature, as well as a potential partnership to boost digital distribution. However, the brokerage firm tempered its pessimism by noting, "...our tactical downgrade may prove to be too cautious...The company has a share buyback authorization in place and the short interest remains extremely high, both of which could provide support for the shares."

In fact, short interest on NFLX could fairly be called "massive." No less than 68.5% of the stock's available float has been sold short, and it would take 17.6 trading days for all these bearish bets to be repurchased at the shares' average daily volume. An unwinding of these shorted shares could definitely support future gains in the equity.

At last check, NFLX is down more than 1%, but is holding steady to support from the 30 level. The shares are up about 17% year-to-date.