👋 What’s up, traders! Netflix is at a critical support zone—what’s your take on this setup?
🚀 Hope everyone’s having a great trading day! Here’s an interesting technical setup on NFLX. Let’s break it down together!
Netflix (NFLX) has been trading inside a well-defined ascending channel, respecting both channel resistance (upper boundary) and channel support (lower boundary). Recently, the stock experienced a sharp sell-off, leading to the completion of a major gap fill, highlighted in blue.
Historically, gap fills often act as key decision points, where price either reverses or breaks down further. Now, NFLX is testing a critical support zone at the lower boundary of the channel.
Why is this level important-:
The gap is now fully closed, removing the imbalance created by the previous breakout.
The ascending channel support is holding for now, making it a key zone for buyers.
If buyers step in, a bounce could follow, while a break below this level may lead to further downside.
Key Observations & Market Psychology-:
Gap Fill Completed: The price has fully retraced the previous breakout gap—this is often a point where traders react.
Strong Bearish Momentum: The recent decline was aggressive, showing significant selling pressure.
Volume Analysis: If buying volume increases at this level, it could indicate a potential reversal. Conversely, heavy selling volume may confirm further downside.
Confluence Factor: This support aligns with previous price action, making it a high-probability zone for a reaction. Let's discuss trading plans according to above obsevations.
Bullish Scenario (Bounce from Support)-:
If the price respects the channel support and forms a bullish reversal candlestick pattern, such as a hammer or bullish engulfing, this could trigger a bounce.
A move above $920 - $940 would indicate strength, with targets at $970 - $1,000.
A break above $1,000+ could lead to a continuation toward the channel resistance around $1,050.
Bearish Breakdown (Failure of Support)-:
If NFLX breaks below the ascending channel support with strong volume, further downside could be expected.
The next key support zone would be around $840 - $800, where buyers might step in again.
Increased selling pressure could accelerate the decline, making short positions favorable.
Educational Insight: Why Do Gap Fills Matter?
Gaps occur when price jumps between two trading sessions without any activity in between. These gaps often act as magnets, as price tends to revisit them before deciding the next trend.
Why does this happen?
Gaps represent areas of low liquidity that markets often seek to fill.
Once a gap is filled, the price either reverses strongly or continues in the direction of the trend.
Final Thoughts & Trade Approach
Netflix (NFLX) is currently at a make-or-break level, and the next few trading sessions will determine it's direction.
If buyers step in, this could be an excellent long opportunity.
If sellers push it lower, the breakdown could open doors for further downside.
What’s your take on NFLX? Will it bounce or break down? Let’s discuss in the comments!
Hope you will like the publication
Best Regards- Amit
🚀 Hope everyone’s having a great trading day! Here’s an interesting technical setup on NFLX. Let’s break it down together!
Netflix (NFLX) has been trading inside a well-defined ascending channel, respecting both channel resistance (upper boundary) and channel support (lower boundary). Recently, the stock experienced a sharp sell-off, leading to the completion of a major gap fill, highlighted in blue.
Historically, gap fills often act as key decision points, where price either reverses or breaks down further. Now, NFLX is testing a critical support zone at the lower boundary of the channel.
Why is this level important-:
The gap is now fully closed, removing the imbalance created by the previous breakout.
The ascending channel support is holding for now, making it a key zone for buyers.
If buyers step in, a bounce could follow, while a break below this level may lead to further downside.
Key Observations & Market Psychology-:
Gap Fill Completed: The price has fully retraced the previous breakout gap—this is often a point where traders react.
Strong Bearish Momentum: The recent decline was aggressive, showing significant selling pressure.
Volume Analysis: If buying volume increases at this level, it could indicate a potential reversal. Conversely, heavy selling volume may confirm further downside.
Confluence Factor: This support aligns with previous price action, making it a high-probability zone for a reaction. Let's discuss trading plans according to above obsevations.
Bullish Scenario (Bounce from Support)-:
If the price respects the channel support and forms a bullish reversal candlestick pattern, such as a hammer or bullish engulfing, this could trigger a bounce.
A move above $920 - $940 would indicate strength, with targets at $970 - $1,000.
A break above $1,000+ could lead to a continuation toward the channel resistance around $1,050.
Bearish Breakdown (Failure of Support)-:
If NFLX breaks below the ascending channel support with strong volume, further downside could be expected.
The next key support zone would be around $840 - $800, where buyers might step in again.
Increased selling pressure could accelerate the decline, making short positions favorable.
Educational Insight: Why Do Gap Fills Matter?
Gaps occur when price jumps between two trading sessions without any activity in between. These gaps often act as magnets, as price tends to revisit them before deciding the next trend.
Why does this happen?
Gaps represent areas of low liquidity that markets often seek to fill.
Once a gap is filled, the price either reverses strongly or continues in the direction of the trend.
Final Thoughts & Trade Approach
Netflix (NFLX) is currently at a make-or-break level, and the next few trading sessions will determine it's direction.
If buyers step in, this could be an excellent long opportunity.
If sellers push it lower, the breakdown could open doors for further downside.
What’s your take on NFLX? Will it bounce or break down? Let’s discuss in the comments!
Hope you will like the publication
Best Regards- Amit
Note
Still channel is defending! Let's see how it will work in today's sessionTrade active
What can we say this bounce or spurt on support line! Some testing portion added near trendline at 875 levels after seeing some positive developments on smaller time frame will add more but waiting for some more improvements in overall markets as current scenario is not favourable for going full fledged longs for this setting stop to cost price.
Note
Today price reached 960 close to target one 970 fom the entry price of 875 it was a good gain of almost ten percent so far for this support bounce trade but I booked half trade profit at 957 as the gap area upper band resistance are clearly visible, for rest trading position i will wait for the target and will trail stop loss to cost price from here. Trade closed: target reached
Mentioned 970 target in description completed today so taking my all gains which is more than Ten percent because from many sessions price is taking rejections at the same spot 960 to 968 range but still i am happy that one more Netflix publication of mine completed target. Thanks for reading and supporting the idea, will come again with a new idea on it soon !
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.