Netflix, Inc. (NFLX) Stock Is a Buy, But Only If …

Advertisement

Stocks suffered their worst day of the year earlier this week. On Tuesday, each of the major indices fell more than 1% for the first time since October, and the tech-heavy Nasdaq was the hardest hit with a decline of 1.8%. The selloff took most stocks lower, but the one I want to talk about today is Netflix, Inc. (NASDAQ:NFLX).

Tuesday actually started off great with the stock climbing to a new all-time high of $147.70 in early trading. But then the weakness hit, pushing NFLX stock down more than 2.5% where it is now testing support at the 50-day moving average (the blue line).

As you can see below, shares have not traded below this indicator since September. And even that instance was only brief.

NFLX stock chart view 1

Beyond the 50-day moving average, there are several areas of support working in Netflix’s favor. The first is price support at $137.31 (the black line), which is the intraday low of the consolidation pattern the stock has been in since rallying to a new high in mid-January.

During that rally, NFLX stock jumped higher at the open to form a gap that could be filled on a larger pullback. So the next area of support, and the one I’m watching more closely, is the low end of that gap at $133.65 (the orange line).

I love this company over the long-term, so I’d like to see the stock hold above those support levels. If it does, my outlook will remain bullish and I would be a buyer around the $135 area.

If it can’t hold there, NFLX stock could be vulnerable to pull back to ultimate long-term support at the 200-day moving average (the red line) currently around $115.

Matthew McCall is founder and president of Penn Financial Group, an investment advisory firm. Matt also is Editor of FUTR Stocks and the ETF Bulletin. Earlier this year, Matt and Hilary Kramer teamed up on Breakout Stocks where Matt serves as the Co-Editor. Most recently, Matt and Hilary joined forces again. This time, they are helping individual investors make money trading ETFs. For more on their latest project, visit www.etfedgesummit.com.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2017/03/netflix-inc-nflx-stock-buy-if/.

©2024 InvestorPlace Media, LLC