Netflix Inc (NASDAQ: NFLX) traded lower yesterday, breaking below 526.00, a support marked by the low of Monday. In our view, the move confirmed a forthcoming lower low and signaled the continuation of the downtrend marked by the downside resistance line taken from the high of November 17th. Thus, we do see decent chances for further declines.
At first, we expect a test near the 505.00 zone, which acted as a floor between July 20th and August 12th, the break of which could extend the fall towards the 486 territory, marked by the low of June 16th. If there are no buyers to be found near that zone either, we may experience extensions towards the low of November 10th, at 463.00.
Taking a look at our short-term oscillators, we see that the RSI turned down, falling back below the 30 line, while the MACD, although slightly above its trigger line, is already well into the negative territory, and appears ready to turn south again. Both indicators detect downside speed and support the notion for further declines in this stock.
We believe that the outlook could change back positive upon a break above the 584.00 barrier, which provided support between December 15th and 20th. This could encourage participants to push the action towards the 605.00 zone, the break of which could result in a test at the high of December 30th, at 620.00. Slightly higher lies the 633.00 zone, marked by the high of December 8th, the break of which could pave the way towards the inside swing low of November 23rd, at 646.00.

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