Stock of the day: Netflix

Friday’s session closed with a sharp decline, taking the stock below crucial technical levels. The dominant feature on the chart is a large head and shoulders pattern, marked in orange. This classic reversal formation has been forming over several months and typically signals the exhaustion of a bullish trend and the beginning of a potential downtrend.

The neckline of this formation, marked in red, acted as the last major support for bulls. Last week, that neckline was clearly broken, triggering a confirmed sell signal. But the bearish developments don’t end there. Alongside the neckline, Netflix also broke below a key long-term uptrend line, shown in purple. This trendline had been connecting higher lows since the early stages of the post-COVID recovery, serving as a strong dynamic support. Its failure further confirms the shift in sentiment from bullish to bearish.

Looking ahead to the new trading week, the stock is expected to open with a bearish gap, which could lead to even more downside pressure as sellers continue to dominate the narrative. Unless the price quickly rebounds above both the red neckline and the purple trendline, there is little to suggest any near-term recovery. In fact, as long as the stock remains below those levels, the bearish outlook remains firmly intact.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-netflix-10