Technical Analysis – Netflix stock loses ground near to 3-month low; bearish bias

Melina Deltas, XM Investment Research Desk

Netflix stock price plummeted to a new three-month low of 292 during yesterday’s trading session, retaining the bearish movement that broke the medium-term ascending trend line. Also, the price has been developing beneath the flatten 200-day simple moving average (SMA), suggesting the start of a negative trend.

In technical oscillators, the MACD is strengthening its bearish momentum below the zero line, while the RSI and the Stochastics are moving towards oversold levels, pointing to another negative session.

Should the stock price stretch below December’s low of 292, immediate support could come near the 281 barrier. A significant step lower could then send the bring the bearish sentiment back into play, sending price probably towards 265, which was a strong barrier back in October 2019.

On the flip side, the 61.8% Fibonacci retracement level of the 253-393 up leg at 306 may halt upside corrections. If traders continue to buy the stock, the price could rise until the 50.0% Fibonacci of 323, which currently coincides with the 200-day SMA, while steeper increases could also touch the 339 resistance, being the 38.2% Fibonacci.

To sum up, the market is expected to hold bearish in the short-term and neutral in the medium-term.