Keep an Eye on Netflix Stock Price Levels Following Soft Outlook from Streamer

Netflix shares took a hit in extended trading on Thursday as the streaming giant’s soft outlook overshadowed its second-quarter results, which had exceeded Wall Street expectations. Technical analysis of the Netflix chart revealed key signals indicating a potential reversal in the stock’s uptrend.

The chart showed that Netflix shares had been steadily climbing since mid-2022, with the trend gaining momentum after the 50-day moving average crossed above the 200-day moving average to form a bullish golden cross pattern. However, recent technical indicators suggested a weakening buying appetite.

Two significant peaks formed in June and July, potentially creating a double top pattern, which typically signals a trend reversal. Additionally, the relative strength index (RSI) showed a bearish divergence as the share price made a second high, indicating a loss of momentum. The stock also broke below the 50-day moving average, a bearish signal that investors may be preparing for a “sell the news” event.

Investors were advised to monitor key retracement levels on the chart in case of a post-earnings decline. These levels included $638, $550, $500, $440, and $365, where buying interest may be expected based on previous price actions and support levels.

Following the news, Netflix shares dipped by 0.2% to $641.89 in after-hours trading. The analysis and opinions expressed in the report are for informational purposes only, and readers are advised to conduct their own research before making any investment decisions.