Netflix Inc. - (NFLX) - October 17, 2023
Netflix (NFLX) reports earnings after the close on Wednesday afternoon. In addition to the results, investors may look at subscriber numbers for signs of how the company is faring in the streaming wars, and to management comments for indications on what impact the writers’ and actors’ strikes have had on Netflix relative to their competitors.
In the last three months, the shares have dropped 18.3%, which suggests that expectations have come down significantly already. NFLX has also fallen in the rankings within the SIA S&P 100 Index Report, dropping 45 spots over the last quarter, including a fall of 28 positions in the last month to 53rd place, exiting the green zone and sliding back down into the Red Unfavored Zone for the first time since May.
This three-year Netflix (NFLX) chart features two good examples of the Reversal of Polarity principle; that once broken, support levels flip to resistance, and vice-versa. Back in July, an uptrend in NFLX ran into resistance near $480.00, a former support level dating back to 2020. Also note how the $400.00 round number has flipped back and forth between being a support level and being a resistance level, its current status.
Since July, the shares have come under distribution with NFLX establishing a new downtrend of lower highs, breaking down below its 50 and 200-day moving averages, and snapping an uptrend support line.
Next potential downside support appears near $320.00, where a measured move and previous support converge, followed by the $300.00 round number.
A year-long recovery trend in Netflix (NFLX) shares was contained by resistance in the $470.00 to $480.00 range back in July, near a previous support zone. Since then, the shares have been backsliding, staging bearish Double Bottom breakdowns in August and September and falling back toward the $460.00 level this month.
Next potential downside support tests appear near $344.10, then $311.65, where vertical and horizonal counts converge with previous column highs and lows, then the $300.00 round number. On a bounce, initial resistance may appear near $387.50 based on a 3-box reversal, then a longer term support/resistance level near $419.45.
With a bearish SMAX score of 2, NFLX is exhibiting weakness against the asset classes.
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