NFLX breaks below key technical support level
Netflix Inc. (NFLX) Technical Analysis Report for Jun 14, 2019 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, NFLX ended the week -5.86% lower at 339.73 after losing $3.70 (-1.08%) today, underperforming the Nasdaq 100 (-0.42%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (NFLX as at Jun 14, 2019):
Friday's trading range has been $7.25 (2.12%), that's below the last trading month's daily average range of $8.98. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NFLX.
After trading as low as 336.15 during the day, the share found support at the 200-day moving average at 337.29. The last time this happened on April 18, 2016, NFLX actually lost -12.97% on the following trading day. Prices broke below the key technical support level at 341.39 (now R1), which is likely to act as resistance going forward.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the close-by swing low at 332.65 where further sell stops might get activated. As prices are trading close to June's low at 332.65, downside momentum could accelerate should the market mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Netflix. Out of 7 times, NFLX closed lower 71.43% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 71.43% with an average market move of -7.09%.
With three out of the other four FAANG Stocks closing lower today, the ones that stand out on the negative side are AAPL losing -0.73% and GOOGL closing -0.43% lower. On the flipside the best performer has been FB closing 2.18% higher. Read more