Technical Update - Netflix. Catching a falling knife?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Well, the knife has already fallen, but it is not unlikely to fall further. Bottom fishing carries high risk and after such a massive sell-off Netflix has experienced high volatility should be expected
Daily chart showing Divergence on RSI i.e. the RSI value after yesterday’s sell off is higher than the RSI from 26th January low. Divergence is usually a sign of a trend is weakening. However, continued selling pressure will push the RSI lower meaning RSI is not currently indicating down trend is about to be exhausted. Netflix is likely to be depressed for quite some time.
Weekly chart shows Netflix is currently trading below the support area from December 2018. If the week closed below $231.23 expect further decline. Next support at around $195.
However, if on the other hand Bottom Fishers manage to lift the beaten down stock to close the week above $231.23 we could see a rebound to around 256.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.