NFLX closes higher for the 2nd day in a row
Netflix Inc. (NFLX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NFLX finished the month 7.44% higher at 488.88 after gaining $3.08 (0.63%) today, significantly underperforming the Nasdaq 100 (1.78%). Trading up to $3.79 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 16th, NFLX actually lost -6.52% on the following trading day. Closing above Thursday's high at 488.35, Netflix confirmed its breakout through the prior session high after trading up to $6.45 above it intraday.
Daily Candlestick Chart (NFLX as at Jul 31, 2020):
Friday's trading range has been $10.30 (2.11%), that's below the last trading month's daily average range of $20.33. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NFLX. Prices continued to consolidate within a tight trading range between 477.51 and 497.79 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical resistance level at 497.79 (R1).
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 497.79 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 477.51 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Netflix. Out of 749 times, NFLX closed higher 52.87% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.01% with an average market move of 1.94%.
With three out of the other four FAANG Stocks closing higher today, the ones that stand out on the positive side are AAPL gaining 10.47% and FB closing 8.17% higher. On the flipside the worst performer has been GOOGL closing -3.28% lower. Read more