Back in January, Netflix (NFLX) returned to the green zone of the SIA S&P 100 Index Report for the first time since the summer of 2020. It’s stay in the green zone was short lived, however, as the shares have recently dropped back down into the Yellow Neutral Zone. NFLX has fallen 22 positions in the last month, including a drop of 3 spots yesterday and is currently in 33rd place.
Netflix (NFLX) appears to be close to a potential technical turning point. Since bottoming out last summer, the shares have been under accumulation, advancing in a step pattern. In recent weeks, the shares have been pulling back, snapping a short-term uptrend line and slipping back under their 50-day moving average.
With the shares holding above longer-term trend lines and the $300.00 round number, and a Symmetrical Triangle emerging, so far this appears to be a correction within an ongoing uptrend. A move back above the 50-day average near $335.00 and the current resistance line near $340.00 would signal that the underlying uptrend has resumed with potential resistance at the February peak near $380.00 or the $400.00 round number.
A drop down through the initial $295.00 to $300.00 support range, however, would complete the triangle to the downside and signal the start of a new downtrend with next potential support at the December low near $280.00, or the 200-day moving average near $260.00.
This 1% chart highlights the severity of the recent downturn in Netflix (NFLX) shares. An eight-month uptrend ran out of gas in February near $368.00, stalling out short of a long-term 45-degree downtrend line. Since then, the shares have turned downward, first completing two bearish Double Bottom breakdowns that combined into a Bearish Catapult that kicked off a selloff which has extended in to a bearish Low Pole and completed a larger Spread Double Bottom breakdown along the way.
Initial downside support appears in the $300.00 to $301.90 zone, between a round number and a horizontal count, followed by the December low near $276.05. Initial rebound resistance may appear near $330.20 based on a 3-box reversal.
With a bearish SMAX score of 5, NFLX is exhibiting weakness against the asset classes.
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