Stock of the day: Netflix
17 May 2023
On Wednesday, I am bringing you an analysis of Netflix, who is currently in a very interesting place. We are above key support here and buyers need to defend it in order to avoid a major sell signal.
The situation has changed quite dramatically as last week, Netflix had a major signal to buy. It was stemming from the fact that the price escaped the symmetric triangle pattern (black) that had been forming for the past few months. The breakout gave an invitation to open longs, but the fiesta did not last long. On May 12, the price tested the first key horizontal resistance (blue) and failed to break it.
We saw a sharp bounce which can actually be a part of a big false bullish breakout pattern (yellow) - a false breakout from the symmetric triangle, of course. All we need to establish the pattern on the chart is the price coming back inside of the triangle. Let’s see if this support is defended and for how long.