NETFLIX TECHNICAL ANALYSIS 20/12/2018 

• Netflix has established a descending Wedge pattern which will resolve either up or down.
• The Technical indicators reflect a setup for a fall so maintain a disciplined Stop Loss.
• The Investment Thesis is strong, however threats of increased competition and the possible change in the streaming industry dynamic have always been a concern to investors.

Money Flow – is at 59. 80 is ‘Overbought’. 20 is ‘Oversold’.

Momentum – has been in a slow uptrend, but not enough to move the stock price upwards.

On Balance Volume – Need to see shares  be accumulated to pull prices upwards.

Technical Support – is at $265.

WEDGE PATTERN – a tight wedge pattern has formed. The stock price will break from this pattern, either up or down.

When the Wedge Pattern is combined with a high Money Flow reading the possibility of a breakdown has to be considered.

What does that mean at MONEYWISEHHQ.

When the Wedge Pattern is combined with a high Money Flow reading the possibility of a breakdown has to be considered.

Netflix has low exposure to interest rate increase effects or tariffs and the trade war.

The next lower level of Technical Support is near $220. Maintain a very disciplined STOP LOSS near $265. 

At MONEYWISEHQ we look for trades that have the highest probability of success with the lowest risk. With a Wedge Pattern, generally the breakout direction can be determined, but in an irrational market there is no visibility or rules.

As of 20/12/2018 the broader market is near an extreme ‘Oversold’ condition. Towards the end of year, there is the negative catalyst of tax loss selling, but the positive catalyst of seasonality. The Wedge Pattern could go either way.