Netflix, Inc. (NASDAQ:NFLX) chart formed a ‘golden cross’
Netflix is set to gain a new competitor next week when Apple will reportedly unveil its streaming platform.
Netflix shares have risen slightly in the past week and are up 35 percent this year. They are the best performers of the FANG stocks. Miller Tabak equity strategist Matt Maley said the name could still have more room to run.
“This stock already took a little bit of a breather last month and now it’s starting to rally again,” Maley said Tuesday on CNBC’s “Trading Nation. ” “The key that’s really going on right now is the stock is seeing a golden cross with its 50-day moving average moving above its 200-day moving average.”
The bullish golden cross forms when a shorter-term moving average crosses above a longer term. It signals the reversal of a downtrend. A golden cross formed March 11 on Netflix’s charts.
“The last two times in 2015 and 2016, it saw a rally of 120 and 95 percent after they saw the golden crosses,” said Maley. “I’m not calling for that kind of a huge rally but history says it’s been a positive sign,” he said.
Netflix may have difficulty continuing to grow as increased competition muscles its way into the space, said Gina Sanchez, CEO of Chantico Global.
“Netflix is obviously the one with the most to lose,” Sanchez said Tuesday on “Trading Nation.” “My concern is actually that Netflix may actually paint itself into a corner. Everybody is gunning for territory that Netflix has already created. Netflix has a massive spending budget in order to continue to move a needle that quite frankly is getting harder and harder to move in terms of revenue.”
Netflix sales are expected to slow from 35 percent growth in 2018 to 24 percent by 2020.
“You look at the average number of subscriptions that cord cutters have. You’re talking about three-plus subscriptions. Quite frankly, viewers are getting subscription fatigue. At some point you’re going to have to see some consolidation,” Sanchez said.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 398.14.
The projected lower bound is: 354.70.
The projected closing price is: 376.42.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 63.2487. This is not an overbought or oversold reading. The last signal was a sell 2 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 64.20. 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 41 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 190.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 buy 0 period(s) ago.
Rex Takasugi – TD Profile
NETFLIX INC closed up 16.440 at 375.220. Volume was 1% below average (neutral) and Bollinger Bands were 65% narrower than normal.
Open High Low Close Volume___
358.910 375.900 357.010 375.220 10,917,165
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 359.63 349.31 340.22
Volatility: 36 40 56
Volume: 6,941,408 9,696,006 11,654,021
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 10.3% above its 200-period moving average and is in an upward trend. Volatility is 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 4 periods.
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