• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Should We Tune Into or Out of Netflix Ahead of Earnings?

What are the technical reasons to buy the stock?
By BRUCE KAMICH
Jan 20, 2022 | 02:54 PM EST
Stocks quotes in this article: NFLX

Streaming giant Netflix (NFLX) is reporting their Q4 numbers Thursday after the close of trading. Prices have been in a steep decline since the middle of November so let's tune into the charts and indicators to see if the programming is for a bounce or for further losses.

 
In this daily bar chart of NFLX, below, we can see that prices rallied from May to the middle of November but then turned quickly to the downside. Prices broke below the 50-day moving average line and its slope turned negative. NFLX continued lower and broke below the slower-to-react 200-day moving average line in early January. The 200-day line is now flat.
 
The On-Balance-Volume (OBV) line topped out in October/November and weakened. A declining OBV line tells us that sellers are more aggressive with heavier volume being traded on days when NFLX closes lower. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
 
 
We are not encouraged with this weekly Japanese candlestick chart of NFLX, below, as prices broke below the 40-week moving average line with a large red candle (bearish). The weekly OBV line is in a decline and the MACD oscillator is nearly down to the zero line. 
 
 
In this daily Point and Figure chart of NFLX, below, we can see that the software is projecting a downside price target in the $396 area. Ouch.
 
Bottom line strategy: NFLX has made a big decline and is oversold using tools like the stochastic indicator, but there has been no slowing in the pace of the decline - no bullish divergence from the 12-day momentum indicator. I have no special knowledge of what the numbers are going to be tonight but I am finding no technical reasons to buy the stock. Avoid.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Stocks | Technical Analysis | Trading | Movies | Earnings Preview | Investing

More from Investing

Bettin' a Buck on Devon

Mark Sebastian
May 24, 2022 1:39 PM EDT

Here's where I see Devon Energy going and how to play it.

Can This China Tech ETF Surprise on the Upside?

Bruce Kamich
May 24, 2022 1:18 PM EDT

Sometimes the most uncomfortable trade can be the best trade.

Best Buy Has Been Ripped in Half, Is It Ready for a Recovery Bounce?

Bruce Kamich
May 24, 2022 12:17 PM EDT

Let's see what's in store for this retailer after its shares have been halved in six months.

For Those Keeping Score of Failed Bounces in May, We're Up to 4

James "Rev Shark" DePorre
May 24, 2022 10:58 AM EDT

The essence of a bear market is failed bounces, and we have an epic one here on Tuesday.

Should You Buy a Retest of Trade Desk's Low?

Bruce Kamich
May 24, 2022 10:41 AM EDT

Here's what the charts tell us.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login