Shares of Netflix Inc. (NFLX) have been stuck in a tight sideways range all year. Dips to $345 and just below look like they have been bought, but it also looks like the rally-highs the past five months have "rolled over." What message are the charts sending us?
In this daily bar chart of NFLX, below, we can see that the slope of the 50-day moving average line has turned bearish and tests of the line have failed in the latter part of May, and so far in June. The daily trading volume looks like it has dried up and the On-Balance-Volume (OBV) line has also been stuck in a narrow range. The Moving Average Convergence Divergence (MACD) oscillator moved below the zero-line in May for an outright sell-signal.
In this weekly bar chart of NFLX, below, we see a mostly bearish chart. Prices are above the 40-week moving-average line, but the slope of the line is neutral. The weekly OBV line shows a peak last June and a lower high this year. The MACD oscillator shows a peak last June and another take-profits sell-signal in May of this year.
In this Point and Figure chart of NFLX, below, we can see that the software is projecting a possible downside price target in the low $290 area.
Bottom line strategy: NFLX has been stuck in a relatively narrow trading range and that condition will not last forever. A breakout will happen at some point in time, and I suspect it will be on the downside.