After the Netflix Inc stock (NASDAQ: NFLX) took a strong hit between the end of February and mid-March, together with the rest of the market, the share price managed to, not only claw back the losses made during that sell-off, but also to move further north and hit a new all-time high. The American media-services provider had benefited from the global lockdown, as more people were in search of entertainment. Last week, NFLX reached the level at 458.89, where it has never been before. But as the lockdown measures continue to ease, investors might have started to take in their profits and as a result of that, the share price fell below its short-term upside support line taken from the low of March 16th. There is a good possibility that in the near term, NFLX may end up correcting further down, hence why we will take a somewhat bearish approach, at least for now.
The share price may end up falling further, especially if it drops below the 427.31 hurdle, marked by the low of May 13th. That’s when we will examine a potential move towards the 411.73 obstacle, a break of which could open the door for a re-test of the 393.75 area. That area marks the low of April 29th.
Judging from the RSI and the MACD on our 4-hour chart, both indicators started pointing lower. In addition to that, the RSI is below 50 and the MACD is below zero and its trigger line, which suggests a rising downside momentum. The oscillators seem to be in support of the idea of a bit of declines in the near term.
Alternatively, if by any chance, NFLX climbs back above the 444.00 barrier, marked by the low of May 20th, this could interest more investors to jump in. That said, there may be more buyers, if the stock rises above its all-time high, at 458.89, as such a move would break the ceiling and place the share price in uncharted territory. Then, the search for a new strong resistance level would start again.
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