- Netflix (NFLX) stock remained range-bound because of overhead resistance.
- The stock will rally above the overhead resistance if a breakout occurs at 380.
- Resistance Level: $360, $380, $400, $420.
- Support Level: $300, $280, $260, $240.
On January 28, Netflix posted its last quarter performance on earnings, despite the growing competition. Netflix recorded revenue growth of 30.5%. As the revenue reached a high of $5.47 billion, the share earnings were $1.30 per share. In the same vein, Netflix stock is valued at 100 times P/E (price-earnings). It indicated that stock has a sustainable growth of 35-40% over the years.
NFLX Long-term Trend (Weekly): Ranging
Netflix (NASDAQ: NFLX) stock has remained in a range-bound move since June 2019. Today, the upward move is likely to be repelled because of the overhead resistance at $400.
In retrospect, the bulls have not been able to break the overhead resistance since June. Each time, the bulls attempt the resistance zone, the stock will fall to the support at $250. This is an indication that the stock lack buyers at the resistance zone.
According to the stochastic indicator, the stock is already in the overbought region of the market. The stock is above 80% of the daily stochastic. The implication is that at the overbought condition buyers are not available to push the stock upward. Sellers are generated to push the stock downward. This is one of the reasons Netflix stock is not rising.
NFLX Medium-term Trend (Daily): Bullish
On the daily chart, the stock is in an upward move but is repelled at $360. In retrospect, Netflix stock was of high value between January and August 2019.
The stock values were ranging between $340 and $380 and were relatively stable. Neither the bears nor the bulls were able to break their respective levels. On July 11, 2019, a fundamental stock news item caused the stock to gap down.
The stock depreciated further but found support at $260. At the moment, the stock bounces from the support at $260 to the resistance at $360.
Meanwhile, the Relative Strength Index Period 14 level 59 indicates that the stock is above the centerline 50. Netflix stock is likely to rise since they are in the bullish trend zone.
As earlier indicated, our stochastic oscillator has raised the odds that the stock is trading in the overbought region. The stock’s upward move will possibly be hampered because of the absence of buyers.