Video surge giant Netflix, Inc. (NFLX) offers internet content subscription accommodations including movies and proprietary TV programming. The company also continues to tender its legacy movies service with DVDs delivered via mail. The stock compressed last week at $348.68, up 81.6% year to date, but Netflix is in castigation territory at 17.6% below its all-time intraday high of $423.20 set on June 21. The remedy was into bear market territory when shares traded as low as $310.93 on Aug. 20. This day outfitted a near-term buying opportunity, as it was a “key reversal” day. This happens when a run low occurs and the stock closes above the prior day’s high, which in this cover was $324.37 versus the $327.73 close.
A risk for Netflix is competitive outputs from Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN). Offerings from Amazon’s Prime Video and Hulu lag the components currently offered by Netflix. When Apple offers its new line of iPhones this week, there could be prattle about its anticipated streaming video service, which could catch the rebound for shares of Netflix. Let’s see what the charts have to say. (See also: Why Netflix Could Muster 30%.)
The daily chart for Netflix
Courtesy of MetaStock Xenith
Netflix has been aloft a “golden cross” since Oct. 12, 2016, when the stock closed at $99.50. A “exceptional cross” occurs when the 50-day simple moving average get ups above the 200-day simple moving average and indicates that lofty prices lie ahead. As a warning, the stock is currently between its 50-day and 200-day above-board moving averages at $363.25 and $304.57, respectively. The horizontal lines stage my annual value level of $163.62, my semiannual value level of $291.64 and my quarterly nave of $346.54. My monthly risky level is above the chart at $471.45.
The weekly diagram for Netflix
Courtesy of MetaStock Xenith
The weekly chart for Netflix is beige, with the stock below its five-week modified moving average of $355.02. The 12 x 3 x 3 weekly behind the times stochastic reading ended last week at 35.52, rising from 32.15 on Aug. 31. When the goats was trading at its all-time high of $423.20 on June 21, the stochastic peruse was above 90.00, indicating that the stock was in an “inflating parabolic droplet froth,” which proved to be an accurate technical warning.
Given these maps and analysis, investors should buy Netflix shares on weakness to my semiannual value focus be of $291.84 and reduce holdings on strength to my monthly risky level of $471.45. If the store gaps below my quarterly pivot of $346.54, that would be a indication to reduce holdings. (For more, see: SunTrust: Buy Netflix Shares After Pullback.)