Netflix – pennant formation with a “but.”

However, this is at a high level and close to the upper trend channel limit. According to the textbook, the pennant would dissolve on the upside, and the stock would initiate a new rally phase. Our main scenario does indeed predict a break on the upside, but without ushering in a rally lasting several weeks. Instead, it assumes that the trend channel boundary will initially present an obstacle. Should the stock nevertheless break out above USD 785, the USD 800 mark could be targeted shortly thereafter. If the pennant breaks on the downside, this triggers a secondary scenario in which the stock has downside potential to USD 720 and later USD 680.

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