8/4/2018 – Post-Earnings Stock Chart Analysis for Netflix (NFLX)
Post-Earnings Stock Chart Analysis for Netflix (NFLX)
This article is a post-earnings stock chart analysis for Netflix (NFLX). NFLX reported earnings a couple weeks back on July 16, 2018. It pulled back after earnings. In a July 22, 2018 article for FANG stocks I mentioned that the $338 support level was a key area to watch.
Let's review a couple of charts to look at the $338 support level and the price action around it.
NFLX - $338.82 Price Level Breached
Let's start with a short-term 1 year daily candlestick chart. A daily candlestick chart can help to see the details of a larger trend that may be developing.
In my July 22 article for NFLX, I stated it was important for NFLX's share price to remain above the $338.82 price level during its pullback. Since that article, NFLX share price breached the $338.82 price level reaching a low of $328 during its pullback so far. While I did not specifically mention it in the previous article, the $338.82 was an Elliott wave monitoring target. From an Elliott wave perspective, this breach identifies either one more all-time high before a longer consolidation period or the beginning of a longer consolidation period. I think it identifies the first of the two. Kind of like Facebook when it first pulled back on news of its data scandal.
The lower gray shaded box is the pullback area I identified as probable in the July 22 article. The $325 - $330 price range is the top end of the support area while the $295 - $300 price range is the bottom of the support area. So far NFLX's share price bounced off the top of the support area I identified.
As NFLX's share price attempts to rebound from the $325 - $330 support area, the Falling Window candlestick pattern around the $385 price level stands in the way. The amount of selling volume associated with the Falling Candlestick pattern is very significant. This amount of selling volume suggests that the initial attempt to close the Falling Window will fail and its share price will pull back again.
In the unlikely event that NFLX's share price can clear the $385 resistance, it then has resistance from the previous high to deal with. A rebound to the previous high can still produce a 20%+ gain if shares are purchased at these levels. But the road back to a previous high is likely to endure more volatility than in the past.
In addition to breaking below the $338.82 Elliott Wave mark, the selling momentum from the MACD Histogram shows greater selling momentum than the previous pullback. This is one technical indicator suggesting that it may be time for a longer consolidation period. That longer consolidation period could be starting or ready to start soon.
NFLX - Fibonacci Retracement Tool
The Fibonacci Extension Tool's 161.8% Target Line provided for one area to monitor for support during the current pullback. Now let's place a Fibonacci Retracement Tool on the same 1 year daily candlestick chart and see what price levels the 38.2%, 50% & 61.8% Retracement Lines calculate at…….
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I review support and resistance areas for Netflix's share price as well as some tips on how to trade the current price action. Not only that, I discuss what the short-term price action has on the longer-term trend. This update calculates some key technical levels!
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