Netflix surges to a record high as consumers stay at home

Shares of streaming entertainment giant Netflix (NFLX) soared to all-time highs on Wednesday making it one of the top performers in the Nasdaq 100 index. What do the charts tell us?

New Highs 4

Netflix surges to a record high as consumers stay at home 

Shares of streaming entertainment giant Netflix (NFLX) soared to all-time highs on Wednesday making it the #1 performer in the Nasdaq 100 index. Netflix and other streaming services have filled the void in entertainment as movie theatres remain closed and live sports suspended amid the coronavirus pandemic.

Shares in NFLX have soared almost 50% since posting March lows 20 trading days ago. Looking back, the last time Netflix posted a record high was back on June 20th 2018. Price action remained largely in a trading range for almost 2 years as investors struggled with the idea of future user growth prospects amid growing competition from other streaming media providers such as Disney, Amazon and Apple. It seems like the coronavirus pandemic has eased investors concerns regarding user growth after today’s impressive record high move. 

How does Netflix look from a chartists perspective? Is there any trading opportunity left?

Here is a daily chart of Netflix after prices broke above a symmetrical triangle continuation pattern in place since June 20th, 2018. The measured move of the upside breakout yields a target of $592.

It may be hard to imagine any more upside potential after the up move recently however taking a step back and looking at a longer term monthly chart helps us see the bigger picture. Netflix has remained in a long term uptrend since 2002 lows. 

It is always prudent to have a trading plan. Entering into a trade is the easy part, the hardest part is knowing when to exit the trade. Any drop below the breakout level at $395 would be a sign of weakness which could possibly put pressure on prices down towards $289.

Netflix is due to report 1Q earnings on April 21

Happy Trading.

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