Simplistic technical analysis for NFLX (November 2nd 2014)

Last week saw NFLX climb back above $390 to at around $392.77 by the end of the week. In my previous post last week, I had mentioned that trends seem to indicate that Netflix was going to cross 390 at head towards 400 in 2 to 3 weeks.

That turned out to be true. Let us examine this week, what the trends seem to indicate.

To conduct my analysis, I am using the following indicators. We are looking at 6 month candlestick chart for Netflix on Yahoo stocks. I have added the following indicators to the chart.

1. Bollinger Bands at 20 days and 2 Standard deviation
2. 20, 50 and 200 day Simple Moving Averages
3. MACD indicator for 26, 12 and 9

I have also added a fourth indicator

4. 14 day Money Flow Index 

Based on last week, it is clear that $380 was a support level that needed to be tested. Once the stock tested that level on Thursday, it moved up. The growth trajectory seems similar to the rise in beginning of August that was a 3 week trend. Assuming a similar trend started October 16th when the stock bounced back from a poor earnings call, we can see that we are mid way of that trend. This implies by second week of November, we may be testing $415 or so.

Even looking at oversold, overbought indicators, MACD and MFI, we can see that stock still has room to grow from here. This may be tested at $400 and $410 levels for some profit taking since the valuation outlook has not changed substantially. My valuation of intrinsic value remains at $390 for Netflix.


Here are my short term amateur predictions

1. Netflix will rise to $400 by end of next week and continue to 410-415 for the week after.

2. Netflix may test $425 for the week after, but will revert to 410 or so within a 4 week period.

These are the predictions of an amateur so please make your own decisions based on individual analysis or professional advice.