Jim Cramer told viewers of Mad Money Monday evening that for most stocks earnings matter. Good earnings make share prices go up, and bad earnings make prices fall. But for a select group of high-profile growth stocks, earnings don't seem to matter at all. He said that he's dubbed these stocks the "magnificent seven".
The magnificent seven have become household names during the pandemic, Cramer said, and as long as we're waiting on a vaccine, these stocks will continue to rise.
First on the list were Netflix (NFLX) . We last reviewed NFLX a little more than a month ago on September 17 and warned that, "With a number of sell signals or bearish clues, traders should be more defensive or cautious on NFLX. The Point and Figure chart suggests a fall to the $416 area." Prices have not declined to $416 but weaknesses remain.
Let's check out the latest charts and indicators.
In this daily bar chart of NFLX, below, we can see that prices have been stuck in a sideways trading range or consolidation pattern since early July. Prices have crossed below and above the 50-day moving average line. The rising 200-day moving average line has gotten closer to the price action.
The trading volume has diminished since July and the daily On-Balance-Volume (OBV) line has declined since July telling us that sellers of NFLX have slowly become more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has made lower highs as prices have made equal highs the past three to four months.