Netflix’s Big Day

I love charting NFLX. It’s one of those stocks whose chart almost always makes perfect sense regardless of the fundamentals or the news of the day.

The last time we discussed it on this website was Sep 10 when it looked vulnerable to a pullback.

I’ve had a couple of inquiries about NFLX. The charts are not positive at the moment – not since it topped out in the rising white channel after seeing its huge rising wedge break down.

It was a bit of a gimme, and the stock slid almost 8% before stabilizing. Several other reversals have been just as easy to pinpoint [HERE, HERE and HERE.]

Since the company is releasing earnings today and seemingly everyone is watching it closely, let’s see what the charts show.

The gently rising white channel was broken out of on Oct 5 and NFLX completed a nifty little Crab Pattern good for a 13.6% gain from its Sep lows.The breakout and backtest, combined with a very deliberate and carefully constructed rising wedge [thanks, no doubt, to timely share repurchases] makes for a very bullish looking chart.Does that mean it’s destined to continue higher?  We could go ’round and ’round regarding the news/controversies (Dave Chappelle, Squid Game, etc.) and its overly aggressive (IMHO) production slate, and its considerable competition.

But, at the end of the day, NFLX’s chart tells us all we need to know. In this made-to-order market of ours, buoyed as it is by central bank liquidity, share repurchases and zero interest rate policy, the company is likely to do whatever it takes to remain above the white channel top at 619ish – only 2.8% below current prices.

Should it fall below 619, that rising wedge will have fallen apart and the Fibonacci Pattern targets would come into play, targeting the mid-500s.

Stay tuned.






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