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 writersā and actorsā 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.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
