Shares of Netflix (NFLX) continue to look weak. Dips and declines in the $480-$460 area over the past five months have encountered buying support but the buying interest could be waning, leaving the shares vulnerable to a deeper decline.
We looked at the charts of NFLX on Nov. 4 we wrote that, " We were cautious in our Oct. 20 review and we continue to be cautious until the charts tell us otherwise."
In the updated daily bar chart of NFLX, below, we can see that the shares have been unable to start or restart a sustained advance. NFLX is trading between the flat to declining 50-day moving average line while the rising 200-day moving average line is getting closer.
The trading volume has declined from late October and the On-Balance-Volume (OBV) line has been making lower highs since early July suggesting that sellers of NFLX have been capping rallies the past five months. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in sell territory but might generate a cover shorts signal.