Netflix, Inc. (NASDAQ:NFLX) biggest one-day drop since July 2016
Shares of Netflix Inc. NFLX, -9.40% sank 9.4% in afternoon trade Wednesday, putting the on track to suffer the biggest one-day drop since July 2016, and to fall into a second bear-market in two months. The stock has now shed 17% since Oct. 17, when it ran up 5.3% after a big third-quarter earnings and subscribers beat, and has lost 20.9% since closing at it’s last bull-market peak of $381.43 on Oct. 1.
The company has issued $2 billion worth of 10 1/2-year junk bonds this week, with the U.S. dollar portion paying 6.375%, or more than double the 10-year Treasury note. The stock had closed on Aug. 17 at $316.78, or 24% below its July 9 record close of $418.97.
Many market watchers define a bear market as a decline of 20% or more from a bull-market peak, and a bull market as 20% or more rally. The stock then kicked off a new bull market, when it closed Sept. 27 at $380.71, or 20.2% above the Aug. 17 low. It rose a little further to the Oct. 1 high, before turning lower. The stock has was still up 57% year to date, while the S&P 500 SPX, -3.09% has slipped 0.1%.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 352.87.
The projected upper bound is: 334.56.
The projected lower bound is: 267.68.
The projected closing price is: 301.12.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 19 white candles and 31 black candles for a net of 12 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 14.4771. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 8 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 34.31. 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 buy 46 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 -165.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 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 14 period(s) ago.
Rex Takasugi – TD Profile
NETFLIX INC closed down -31.330 at 301.830. Volume was 100% below average (consolidating) and Bollinger Bands were 39% wider than normal.
Open High Low Close Volume___
332.280 333.000 300.730 301.830 10,663
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 334.88 352.68 331.38
Volatility: 89 62 53
Volume: 16,212,865 11,252,628 11,127,752
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 8.9% below its 200-period moving average and is in an downward 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 bearish on NFLX.O and have had this outlook for the last 11 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.