In a break from football, TV viewers got to watch Sunday's Golden Globe ceremony. Despite 17 nominations, the most of any single studio, Netflix (NFLX) only took home two trophies (and less after parties). Let's check in on the charts and indicators on NFLX to see if they can tell us anything new.
In this daily bar chart of NFLX, below, we can see that prices make a low in September. The shares rallied to the bottom end of the gap down created back in July. Prices then rallied above the 50-day moving average line in early November and the slope of this indicator turned upward. The slower-to-react 200-day moving average line was not crossed on the upside until December and its slope is flattening.
The trading volume has been heavy since September and the daily On-Balance-Volume (OBV) line began a rise in late September telling us that buyers of NFLX had turned more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is bullish after a cross of the zero line in November.
In the weekly bar chart of NFLX, below, we can see that the big picture is a large sideways trading range for the past two years. Prices have firmed back above the bottoming 40-week moving average line.
The weekly OBV line has improved from the middle of October telling us that buyers on this longer time frame have turned more aggressive.
The trend-following MACD oscillator crossed to the upside in early November for a cover shorts buy signal and now is just below the zero line and an outright go long signal.
Bottom-line strategy: NFLX could pullback Monday with weakness in the broader market but support should be seen just below $320. Traders could consider going long on weakness if they can risk a close below $300. The $415 area is our 2020 price target.
