Netflix is one of those high-powered, momentum names that everyone loves to hate. From a valuation perspective, the stock is always overvalued. But from a chart/technical view, there is no better name to play when you’re on the right side of the momentum.
Netflix was the number one performing stock from the SPX 500 in 2015, but what has it done for an encore? The first six weeks of 2016 were downright dreadful – the stock lost well over 25% on very high turnover. Investors were staying away from the stock as if it carried some kind of virus. Moreover, there was worry that their earnings were starting to slow down, which hits at the very heart of Netflix growth.
I made Netflix one of my stocks of the year for 2016, and that call was clearly way off – Netflix is down about 13% for the year so far. As you may know, Netflix is part of the FANG group that was first presented by Jim Cramer on Mad Money.
However, once a stock hits bottom, it doesn’t stay there. The price action since early February has been solid. It’s up well over 20% since and on good turnover. Momentum indicators are flashing bullish signals, and the tight range could be broken with price heading toward the magnet 200 ma (circa 105.95). If it pushes through that level on strong volume, we could see the 120 area attacked with vigor.
Netflix (Nasdaq: NFLX) Video Chart Analysis
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About Netflix
Netflix, Inc., an Internet television network, engages in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. The Company operates in three segments: Domestic streaming, International streaming and Domestic DVD. It offer members with the ability to receive TV shows and movies streaming content, including original series, documentaries, and feature films through a host of Internet-connected screens, such as TVs, digital video players, TV set-top boxes, and mobile devices. The company also provides DVDs-by-mail membership services. It serves approximately 75 million members in 190 countries. Netflix, Inc. was founded in 1997 and is headquartered in Los Gatos, California.
