Netflix (NFLX) is scheduled to report its third-quarter results after the close of trading Tuesday, so let's check out what is playing on the charts and indicators of the streaming service.
In this daily bar chart of NFLX, below, we can see a mixed picture. Prices have been trading sideways since late July. The slope of the 50-day moving average line has turned positive. The 200-day moving average line could be broken in the weeks ahead by prices moving sideways rather than up. The trading volume shows a small increase from the middle of September. The On-Balance-Volume (OBV) line has crept higher from early May in a step-wise fashion. The Moving Average Convergence Divergence (MACD) oscillator is neutral as it hugs the zero line.
In this weekly Japanese candlestick chart of NFLX, below, we see a mixed picture. Prices are trending sideways but remain below the declining 40-week moving average line. The weekly OBV line shows leadership with its rise from lows in May/June. The MACD oscillator shows a rise toward the underside of the zero line but we are not at a buy signal. The candles are showing us upper and lower shadows -- mixed.
In this daily Point and Figure chart of NFLX, below, we can see a potential upside price target in the $289 area, but a trade at $253.21 is needed to refresh the uptrend.
In this weekly Point and Figure chart of NFLX, below, we can see a downside price target in the $180 area.
Bottom line strategy: In our Sept. 28 review of NFLX we wrote, "Maybe the fundamentals for NFLX are improving. Maybe not yet. I will stay on the sidelines until I see evidence that a sustained rally is possible." Unfortunately, the charts are still mixed.
I have no knowledge of what NFLX will be telling shareholders Tuesday evening, but the technical path is not clear. I would sit this one out.
