Stock of the day: Netflix

In today’s stock of the day, let’s take a look at Netflix, which has been under pressure recently but is showing signs of resilience. Over the past few months, the stock developed a potentially dangerous bearish pattern – a Head and Shoulders formation marked clearly with yellow rectangles on the chart. Earlier this month, the neckline of this formation, marked with a black line, was broken to the downside, suggesting the beginning of a downtrend. However, sellers failed to hold the momentum.

Interestingly, the breakdown turned out to be temporary. Buyers managed to reclaim the neckline, and more importantly, the price respected a long-term uptrend line, marked in green, which has been guiding the bullish trend since 2023. This failed breakout and the defense of the uptrend line are important bullish signals, indicating that buyers are not giving up just yet.

Now, for a full-fledged buy signal to emerge, we need confirmation. That would come in the form of a breakout above the orange downtrend line, which connects the lower highs from February and March. A daily close above this resistance would invalidate the bearish setup and offer a solid long entry opportunity with a renewed bullish outlook.

As it stands, Netflix is caught between conflicting forces, but if the bulls manage to push it above the orange resistance zone, we could see a strong move higher.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-netflix-11