Netflix, Inc. (NASDAQ:NFLX) Execs Welcome Competition From Apple

Netflix, Inc. (NASDAQ:NFLX) Execs Welcome Competition From Apple

Netflix, Inc. (NASDAQ:NFLX) Execs Welcome Competition From Apple

On the surface, the comment sounded amiable enough.

At a press event Monday, Netflix (NASDAQ:NFLX) CEO Reed Hastings said that while “Apple (NASDAQ:AAPL) is a great company…we prefer to let our customers watch our content on our service. We have chosen not to integrate with their service.”

Hastings was referring to the long-anticipated introduction of an Apple video streaming service that’s expected to debut at an event on March 25. It’s been publicized with the tagline, “It’s show time.” Speculation about the event says Apple’s new service will include original content as well as subscriptions to other streaming services as part of its offering. With these new comments, Netflix is saying it will not be one of the participants.

It’s complicated

Hastings was tactful about rejecting Apple’s speculated streaming service, but Netflix turning down the invitation wasn’t too surprising. The relationship between the two has recently become strained.

The ability to sign up for Netflix through Apple’s App Store was initially a boon for Netflix, giving the streaming provider far greater visibility than it might have achieved on its own. After nearly three years, however, Netflix became frustrated with Apple taking a chunk of the monthly subscription price for customers that chose to sign up via the App Store and pay with iTunes. Apple assessed Netflix and other app developers a 30% commission on subscriptions for the first 12 months, then 15% for each successive month. This charge has been labeled the “Apple Tax” by detractors.

Netflix began testing a workaround in mid-2018 that would redirect new and renewing customers to the company’s website, cutting Apple — and its commission — out of the equation. Earlier this year, Netflix announced it would no longer support iTunes as a payment method for new members.

Why isn’t Netflix worried?

The competition is ramping up on several fronts, so are Hastings and company just whistling in the dark, or do they know something we don’t? Apple and Disney may be among the toughest competitors Netflix has faced yet, and they are certainly among the most well funded.

The key to navigating a more challenging competitive environment, according to Hastings, is by doing what the company does best. “All we have to do to succeed is to continue to stream great content and not get too distracted,” he said. That strategy has helped Netflix become the premiere streaming service in the world, with more than 139 million subscribers and growing. Maybe Hastings is on to something after all.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 381.90.

The projected lower bound is: 338.11.

The projected closing price is: 360.00.

Candlesticks

A black body occurred (because prices closed lower than they opened).
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.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NETFLIX INC). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 55.8147. This is not an overbought or oversold reading. The last signal was a sell 1 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 54.03. 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 40 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 67. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 27 period(s) ago.

Rex Takasugi – TD Profile

NETFLIX INC closed down -4.660 at 358.780. Volume was 32% below average (neutral) and Bollinger Bands were 74% narrower than normal.

Open High Low Close Volume___
366.400 366.960 356.800 358.780 7,541,425

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 358.07 348.11 340.14
Volatility: 26 41 56
Volume: 6,470,881 9,850,065 11,634,996

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.

Summary

NETFLIX INC is currently 5.5% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 3 periods.

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