Chart of the Week: Netflix
Hey, good morning everybody. Happy Wednesday. It’s time for our chart of the week. And this week we’re gonna focus in on Netflix, which reported earnings about a week or so ago. Pretty strong earnings and the stock made a really nice move.
You know, there’s not a lot of good looking charts on the bullish side to find here, outside of gold and maybe a couple of energy names. But Netflix is one of those names that actually looks pretty decent on the chart, and we think that if the market does turn around and starts moving back upwards, this stock could do well. It has had some really good relative strength of late. Let’s take a look at the chart here as we speak.
One thing that’s notable here, is you can see it has created what is called a bullish W pattern. What is that? That’s when we make a move down in the early part of March, make a run back up towards those highs – we went a little bit further than we would normally would go. We usually would have stopped at about the 20 day moving average. But that didn’t stop it this time around.
Came back down and made a move – carved the right side of the base here. And we have this W pattern. Usually, what that means is that we have a low come back up, test that low, and successfully move about that resistance level. So we haven’t closed above there yet. What is that resistance level? That’s about $1,000 on Netflix right now.
We did see some good strong volume over the past couple of sessions. Increasing volume as the stock was going up and stock market was going down – which is a positive. We do have a bull signal on the MACD, too. And, as I mentioned earlier, we have good relative strength making higher highs and higher lows here. This is not anything that you see happening right now in a lot of names in technology, media, so forth. This is where Netflix is home to.
So where do we see Netflix going?
I think first off, we have that resistance level form the old highs from back in February at about $1,060 – 1,062. Make a run up there – I think that we can make a run there – then pull back a little bit, make a higher high and a higher low, and then make a run through that resistance level, test back, check back in there, and then make a run towards $1,100 – 1,175.
This is a name that I recently profiled with Jim Cramer on an “Off the Charts” segment, along with Spotify and Roku. I was pretty bullish on Netflix when we did that episode of “Off the Charts”.
So you know, this one is moving really strong. It’s not far away from an all-time high – again about 5 1/2% – so we’ll see if we can get a move there.
Take a look at Netflix when you get a chance. Thanks so much for watching everyone, and I’ll see you guys next time.
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