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.

More from Equities

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.