Netflix Inc (NASDAQ: NFLX) has been trading in a consolidative manner since October 7th, when it hit a record high slightly below the 650 barrier. However, the stock remained above the upside support line drawn from the low of August 12th, and thus, even if the consolidation continues for a while more, we see decent chances for the bulls to take charge again soon.
Now, the price is trading very close to the support zone between the 615 and 622 levels, marked by the inside swing high of September 8th and the low of October 13th respectively, which appears to bee a decent technical territory for market participants to place some buying orders. However, even if the stock does not rebound from there and pulls back somewhat, the bounce may happen from near the upside line taken from the low of August 12th. This could result in another test near the 650 area, the break of which would confirm a fresh record and may see scope for extension towards the next psychological area, at 700.
Looking at our daily oscillators, we see that the RSI turned down after it hit resistance slightly above 70, while the MACD, although positive, has turned down as well and fell below its trigger line. Both indicators detect slowing upside speed and support the notion for a small slide before the next leg north.
However, in order to start examining the case of a decent bearish correction, we would like to see a clear break below the aforementioned upside line taken from the low of August 12th. This may signal that market participants are not interested in the stock for now and may allow declines towards the 570 or 558 zones, marked by the inside swing high of July 15th and the low of September 20th respectively. If neither barrier is able to stop the slide, then we may experience extensions towards the 527 hurdle, defined as a support by the inside swing high of August 5th.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.90% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2021 JFD Group Ltd.