Netflix (NFLX: sentiment, chart, options) shares have collected a 2% gain after some bullish commentary from Piper Jaffray. The brokerage firm reiterated its "buy" rating and its $45 price target on the online firm, noting that the stock is looking undervalued as it trades below 30. During the second quarter, NFLX managed to boost site traffic by 2%, bucking a usual seasonal downtrend. Cheered by this news, Piper Jaffray said there is a "high likelihood ... of strong results for the next several quarters."

The brokerage firm also offered 3 possible outcomes for 2009 earnings. The worst-case scenario would be $1.21 per share; mid-case is $1.50 per share; and best-case is $1.81 per share. On average, analysts surveyed by Thomson Financial expect NFLX to earn $1.54 per share during fiscal 2009.

While the stock is still clinging to a slim 2.5% year-to-date gain, NFLX is down significantly from its mid-April highs near the 41 level. As a result, option traders have rushed to purchase bearishly oriented options. During the past 10 days on the International Securities Exchange, traders have bought (to open) approximately 4 puts for each 1 call.

Even more compelling, short interest represents a massive 66% of the stock's available float. In short, the online movie-rental firm looks well-poised to benefit from an unwinding of investor pessimism. However, the road higher could be a rocky one today's rally was stopped short by the stock's overhead 10-day moving average.