Netflix, Inc. (NASDAQ:NFLX) Stock Can Grow 30%, Despite Its Streaming Competition

Netflix, Inc. (NASDAQ:NFLX) Stock Can Grow 30%, Despite Its Streaming Competition

Netflix, Inc. (NASDAQ:NFLX) Stock Can Grow 30%, Despite Its Streaming Competition

The streaming stock wars have begun. Netflix Inc (NASDAQ:NFLX), Apple Inc. (NASDAQ:AAPL) and Walt Disney Co (NYSE:DIS) are now firmly entrenched in a battle over the eyeballs of viewers the world over.

Netflix stock has been down in recent weeks while Disney stock and Apple stock have surged as both companies launched their own streaming services.

But in my mind, NFLX stock is the best suited for massive growth (at least in the streaming world) long-term, while both DIS stock and AAPL stock stand to gain in the short term.

Before I explain why I believe Netflix stock could be the right way to play the streaming market, we have to understand how we got here.

Netflix was the first streaming giant to make its way to the public stock market. Although it started as a movie and video game delivery service hoping to rival the—at the time—massive Blockbuster empire, Netflix was one of the first companies to enter the online streaming space.

Suffice to say that the Blockbuster business model was, well, thoroughly busted and now Netflix thrives on the screens of viewers around the world.

Netflix Inc was so effective that it spawned a series of copiers. There are currently dozens and dozens of streaming services, big and small, general and niche.

Netflix remains dominant, but other upstarts like “Amazon Prime Video” (run by Amazon.com, Inc (NASDAQ:AMZN)) and “Hulu” (owned by Disney) have challenged it for supremacy.

Note that, while Disney owned Hulu, many of its Star Wars and “Marvel Cinematic Universe” titles were licensed out to Netflix.

Even legacy TV channels have tried to fight back against Netflix with their own streaming services, one of the most successful ones being “HBO Go.”

The streaming market, it’s safe to say, is getting crowded. With Apple and Disney entering the ring, we have reached the next stage of the streaming stock wars.

While there were minor skirmishes before, consider the entry of “Apple TV+” and “Disney Plus” as the true beginning of an all-out fight for viewers between streaming behemoths.

While I believe that all three services can thrive in their own right, most people will likely choose only two or three. Bearing that in mind, one streaming service will inevitably emerge on top. And in my opinion, that victor will be Netflix.

The streaming stock wars are heating up, but Netflix Inc remains the top dog for a reason. It has a catalog of strong original programming and a number of binge-watchable and rewatchable programs that will keep it going strong for many years to come, no matter which companies seek to challenge it.

While the threats are real, I ultimately believe that Netflix stock will remain strong, despite the newcomers.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 298.32.

The projected upper bound is: 334.58.

The projected lower bound is: 297.37.

The projected closing price is: 315.98.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 94.5094. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 16 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 69.59. 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 43 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 128.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 17 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 buy 19 period(s) ago.

Rex Takasugi – TD Profile

NETFLIX INC closed up 5.070 at 315.550. Volume was 3% below average (neutral) and Bollinger Bands were 19% narrower than normal.

Open     High      Low     Close     Volume___
308.830 315.730 305.250 315.550 7,878,943
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 300.78 283.04 330.23
Volatility: 32 42 40
Volume: 6,887,964 8,922,250 7,432,467

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 4.4% below 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 30 periods.

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