Netflix Inc. (NFLX) has been frustrating bulls and bears for most of this year. Prices have been locked in a $390 to $330 trading range for months. Let's take a closer look at our charts and indicators to see when we will see a breakout or breakdown from this pattern. Maybe earnings will do the trick?
In the daily bar chart of NFLX, below, we can see the sideways price action noted above. The 50-day moving average line is flat and so is the 200-day line. The trend is flat.
It looks like trading volume has declined from January but the daily On-Balance-Volume (OBV) line has a slight upward bias from late January. The Moving Average Convergence Divergence (MACD) oscillator is slightly above the zero line but poised to cross to the downside again.
In the weekly bar chart of NFLX, below, we an see that prices are above the 40-week moving average line but the slope of the line is flat. The weekly volume bars show a decline this year and the weekly OBV line shows a slight drift lower this year signaling slightly more aggressive selling.
The MACD oscillator could turn up or down depending on the price action in the new few weeks.
In this Point and Figure chart of NFLX, below, the software is projecting an upside price target of $430 but that is assuming that prices break out on the upside. A decline to $355.14 is likely to weaken this chart.
Bottom-line strategy: Relatively narrow sideways trading ranges are frustrating but they do eventually end. Traders should be ready for a breakout or breakdown in the near-term. A trade above $388.41 should be bullish while a break below $331.25 would put the bears in control.