Netflix Is -11% Since June's All-Time High. What Its Chart SaysNetflix NASDAQ:NFLX has fallen more than 10% since hitting an all-time high in June, but the streaming giant is still beating the S&P 500 SP:SPX in the year-to-date, one-year and five-year periods. What does technical and fundamental analysis say is going on?
Let's take a look:
Netflix's Fundamental Analysis
NFLX has shed some 11% as of Tuesday afternoon since peaking at $1,341.15 intraday on June 30, easing especially over the four weeks despite little news.
The only recent negative catalyst came last week, when Citigroup analyst Jason Bazinet (rated at five stars out of a possible five by TipRanks) cut the stock's price target to $1,280 from a previous $1,295. Bazinet also reiterated Netflix's "Neutral" rating, which is considered a "hold-equivalent."
Still, the Citi analyst's $1,280 price target represents about a 7.5% move to the upside from where NFLX was trading at Tuesday afternoon.
Meanwhile, Wall Street expects Netflix to report Q3 results in some two weeks (on or about Oct. 21). The Street is looking for the firm to report $6.95 in adjusted earnings per share on about $11.5 billion of revenue.
If those numbers end up being accurate, that would compare favorably with the year-ago period, with a 28.7% gain from the $5.40 in adjusted EPS that NFLX reported in Q3 2024. Revenues would also have risen 17.3% from the $9.8 billion that Netflix saw a year earlier.
In fact, of the 33 sell-side analysts that I know of that cover Netflix, 27 have increased their earnings estimates since the current quarter began. Just five have cut their forecasts, while one estimate remains unchanged.
Netflix's Technical Analysis
NFLX's one-year chart through Thursday afternoon was telling an interesting story:
Readers will see that the stock benefited from an upward sloping trend that stretched from Autumn 2024 into Summer 2025, as marked with orange and purple fields in the chart above.
This trend ended with NFLX peaking on June 30, with a new trend born the next day. The stock has generally pulled back since July 1 while creating a "falling-wedge" pattern, which is historically a sign of bullish reversal.
Netflix's upsides in the above pattern are the stock's 21-day Exponential Moving Average (or "EMA," marked with a green line) and its 50-day Simple Moving Average (or "SMA," denoted by a blue line). These two lines are running together, so I'll view them as a single pivot.
Now let's zoom in and look at Netflix's chart over just the past eight months:
I've added a "double-bottom" pattern to the above chart above using dotted lines. That's a second pattern of bullish reversal, and it exists inside of Netflix's falling wedge.
Granted, the stock's recent sell-off still has to find support around here. But if it does, NFLX will have just developed two simultaneous bullish patterns.
The double bottom would have a $1,268 pivot, which would be about $60 above the moving averages that we just mentioned. This pivot could produce considerably higher price targets for the stock.
That said, Netflix's other technical indicators above don't agree with such bullishness, or at least don't agree with it just yet.
For example, the stock's Relative Strength Index (the gray line at the chart's top) is relatively weak.
Similarly, Netflix's daily Moving Average Convergence Divergence indicator (or "MACD," marked with gold and black lines and blue bars at the chart's bottom) is close to neutral, as well as closer to bearish than bullish.
The 9-day EMA (the blue bars) is in negative territory, although not far from zero bound. Both the 12-day EMA (the black line) and 26-day EMA (the gold line) are also below zero, with the black line below the gold line. All three of these conditions are typically short- to medium-term bearish signals.
An Options Option
Options traders who want to get NFLX at a "discount" (and get paid to wait for it to potentially go higher) might consider a bull-put spread. This strategy is set up by selling a put while also buying a second put with a lower strike price.
Here's an example:
-- Sell (write) one Oct. 24 NFLX $1,140 put for about $45. This option could expire after Netflix reports earnings.
-- Buy one Oct. 24 NFLX $1,110 put for about $32.
Net Credit: $13
Traders in the above example would pay $1,140 a share for NFLX if forced to buy the stock due to assignment of the short put. However, their net basis would be $1,127 after deducting the net premium collected.
These traders also purchased some downside protection at $1,110 with the second put.
All in, that represents a maximum $30-per-share loss -- the $1,140 strike price on the first put minus the $1,110 strike price on the second.
However, the $13 net premium traders would collect on the entire bull-put spread would reduce the above strategy's maximum theoretical loss to $17 a share at expiration.
(Moomoo Technologies Inc. Markets Commentator Stephen "Sarge" Guilfoyle had no position in NFLX at the time of writing this column.)
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