NFLX breaks below key technical support level
Netflix Inc. (NFLX) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
NFLX finished the week -1.6% lower at 530.79 after losing $11.15 (-2.06%) today, notably underperforming the Nasdaq 100 (-0.39%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 535.10, the stock confirmed its breakout through the prior session low after trading up to $5.07 below it intraday.
Daily Candlestick Chart (NFLX as at Oct 16, 2020):
Friday's trading range has been $24.30 (4.42%), that's far above the last trading month's daily average range of $17.73. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NFLX.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Even with a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 536.49 (now R1), which is likely to act as resistance going forward. The last time this happened on October 6th, NFLX actually gained 5.69% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
As prices are trading close to October's low at 501.70, downside momentum might accelerate should the share mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Netflix. Out of 396 times, NFLX closed higher 57.07% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.35% with an average market move of 2.30%.
With three out of the other four FAANG Stocks closing lower today, the ones that stand out on the negative side are AMZN losing -1.98% and AAPL closing -1.4% lower. On the flipside the best performer has been GOOGL closing 0.79% higher. Read more