Competition Mounts and Netflix, Inc. (NASDAQ:NFLX) Does Fine
Netflix (NASDAQ: NFLX) passed a big test with its fourth-quarter earnings report last week. The company is confronting more intense competition, most notably from Walt Disney and Apple. In the United States, where the effects of new competing services were felt most keenly, the number of Netflix subscribers grew 420,000 in the fourth quarter.
Combining the U.S. and Canada, there were 550,000 additions in the quarter . This is lower than the 1.75 million new subscribers in the year-ago period, and management placed part of the blame on the increased competition (along with price increases). Nonetheless, it is noteworthy that there was subscriber growth in the U.S. and Canada.
The subscription growth comes after the heralded Disney+ came to market in November , with its wide-ranging Disney content (including Pixar, Marvel, and Star Wars franchises) for $6.99 per month or a combined Disney+, ESPN, and Hulu subscription price of $12.99 .This is competitive with Netflix’s three plans, which range from $8.99 to $15.99 per month. Apple TV+ was also launched in November at an introductory $4.99 monthly rate.
Netflix is used to confronting competition. Amazon.com‘s Prime membership plan comes with a streaming service and Hulu launched in 2008, prior to Disney taking full control last year. That’s not even mentioning the traditional cable companies that were entrenched before Netflix and others came upon the scene.
Granted, things are intensifying in the sector, with more streaming services planned, such as NBCUniversal’s Peacock and HBO Max. Netflix has shown it can compete, but my faith in the future is more than merely relying on management’s track record. There are a couple of factors working in its favor.
In an ever-changing world, management has shown a proclivity to keep evolving and adapting. Founded in 1997 , the original model was renting DVDs by mail to compete with video rental stores. The company started streaming content in 2007 and expanded the service internationally three years later. Then, it moved into original content in 2013.
Right now, quality content and distribution agreements make Netflix a compelling company. I wouldn’t bet against the company’s constant forward-looking approach.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 364.87.
The projected lower bound is: 327.01.
The projected closing price is: 345.94.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 48.4069. This is not an overbought or oversold reading. The last signal was a sell 15 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 56.52. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 26 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 45. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
NETFLIX INC closed down -2.650 at 345.090. Volume was 32% below average (neutral) and Bollinger Bands were 24% narrower than normal.
Open High Low Close Volume___
347.390 347.390 340.980 345.090 5,230,001
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 343.39 324.21 322.45
Volatility: 54 37 40
Volume: 11,102,518 6,782,486 7,326,184
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NETFLIX INC is currently 7.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of NFLX.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on NFLX.O and have had this outlook for the last 75 periods.
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