Netflix Consolidates After Earnings Surge Netflix jumped earlier this month after announcing results. It’s now consolidating, and some traders may see potential for more upside.
The first pattern on today’s chart is the bullish gap on October 19 following the quarterly report. Prices cleared a peak of $394.90 from two weeks prior and have remained there since. Has old resistance become new support?
Second, that level is near the 50-day simple moving average (SMA).
Third, NFLX is now trying to form a bullish inside week. That could indicate the stock is digesting its gains and consolidating.
Next you have the falling trendlines along the peaks of July and September. Traders could be watching for a breakout through this resistance.
Short-term indicators may also have gotten more bullish: The 8-day exponential moving average (EMA) is above the 21-day EMA, and MACD is rising.
Last, the fundamental case may have improved because NFLX entered earnings season under a cloud of negativity. It then shocked the bears with strong subscriber growth, making it a potential turnaround story.
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