Netflix, Inc. (NASDAQ:NFLX) Sliding Lower
A month ago, Netflix shares plunged in response to a quarterly earnings report that pointed to slowing subscriber growth. Not surprisingly, the stock bounced back that very day, only to rekindle the downtrend the next day and move to an even lower low.
That pullback ended up with a rebound effort as well, but like the first one, this one soon buckled and resulted in yet another “lower low.” This second trip into lower-low territory largely confirms that the downtrend has taken hold.
- The line in the sand was $328.29 (red, dashed), where NFLX hit a low and bounced late last month. That floor was broken on Wednesday, and then decidedly broken as a floor on Thursday.
- The daily chart also subtly hints that there have been and continue to be more sellers than buyers. None of the bounce efforts were on strong volume, and the Chaikin line is now trending lower again… already below the zero level.
- Zooming out to the weekly chart we can see just how overbought NFLX shares became over the course of the first half of the year. Ripe for a wave of profit-taking, now that it’s started to unravel, the easier it becomes for Netflix stock to continue unraveling.
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 354.23.
The projected upper bound is: 342.90.
The projected lower bound is: 288.88.
The projected closing price is: 315.89.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 11.3684. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 11 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 26.83. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 13 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 -187.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 10 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 2 period(s) ago.
Rex Takasugi – TD Profile
NETFLIX INC closed down -5.660 at 316.780. Volume was 100% below average (consolidating) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
319.010 324.365 312.960 316.780 342
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 339.00 373.56 293.54
Volatility: 27 45 46
Volume: 6,190,267 11,920,992 9,759,105
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 7.9% above its 200-period moving average and is in an downward 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 bearish on NFLX.O and have had this outlook for the last 22 periods. Our momentum oscillator is currently indicating that NFLX.O is currently in an oversold condition.