From the technical side, the Netflix stock (NASDAQ: NFLX) had been moving sideways for quite a while now. From around the beginning of February, the share price ranged roughly between the 335.75 and 385.00 levels. On July 18th, the stock plummeted below the lower side above-mentioned range, opening with a huge downside gap. This was mainly due to their earnings report, showing that the company have missed their projection of 5 million of new subscribers, which actually was around half of that, at 2.7 million. Even though, their revenue has grown from Q1, investors are a bit worried whether the company will be able to deliver on the promises of growing by 7 million of new paid subscribers in Q3. Given the current scepticism of some investors due to a significant rise in competition, there is a chance we could see the stock sliding a bit more, hence why we will take a cautiously-bearish stance for now.
A drop below the 312.21 support area, marked by the low of January 10th, could open the door for a further slide towards the 301.43 mark, which is the high of November 14th, 2018, and the low of January 7th. The price might get a hold-up around there, or even correct back up a bit. That said, if NFLX stays below roughly the 330.00 zone, we will continue aiming to the downside. This time, another move lower could bypass the 301.43 hurdle and the stock may drift to the 280.77 level, marked near the highs of December 12th and 19th, and also near the low of January 4th.
Looking at our oscillators, the RSI and the MACD, both are somewhat in support of the above-discussed idea. Even though the RSI has already fallen below 20, it still points down, which suggests it may stay there for while more. The MACD continues to push further down, away from the zero line. At the same time, it sits below the trigger line and continues to point lower.
Alternatively, if the stock moves back inside the previously-mentioned range, a break above the 335.75 barrier, marked by the lows of February 1st and June 13th, could invite more buyers into the game again. Such a move may clear the path to the 353.75 obstacle, a break of which could lift the share price to the 361.64 level, marked by the lows of July 15th and 17th.
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