Key Takeaways
Netflix ( NFLX ) shares moved higher to start the week as the streaming giant gets set to report earnings after Thursday’s close.
Despite concerns that a tariff-induced recession could slow advertising spending and see consumers reign in discretionary purchases on services like streaming subscriptions, Wall Street has an average "buy" rating on the stock. Analysts at JPMorgan recently pointed out that the company sits positioned to weather an uncertain macro environment given its strong subscriber base .
As the company moves past reporting subscriber numbers, investors will likely be watching for subscription price hikes to help offset the higher production cost of the streamer's broadening content slate into areas such as live sports and event programming. Netflix shares were up 3% at around $946 in recent trading, pushing the stock's year-to-date gain to about 6%.
Below, we take a closer look at Netflix’s chart and apply technical analysis to identify vital price levels worth watching out for ahead of the streaming giant’s quarterly results.
Descending Channel Takes Shape
Since minting their record high in mid-February, Netflix shares have trended lower within a descending channel .
More recently, the stock found buying interest near the pattern’s lower trendline last week, potentially setting the stage for a post-earnings continuation rally.
Meanwhile, last week’s bounce coincided with a strong uptick in the relative strength index (RSI) to indicate accelerating momentum before the indicator dipped slightly on Thursday and Friday as the price consolidated after Wednesday’s rally.
Let’s identify vital support and resistance levels on Netflix’s chart that investors may be monitoring amid the possibility of further price swings this week.
Vital Support Levels to Monitor
Selling from current levels could see a retest of last week’s intraday low around $821. This area on the chart may also provide support near the descending channel’s lower trendline and the stock’s January trough .
A breakdown here could trigger a fall to the next level of vital support at $765. Investors may look to accumulate shares in this region near the upper level of a consolidation period that formed on the chart following last October’s breakaway gap .
Important Resistance Levels to Watch
Further buying this week could fuel a rally to the $1,000 level. This area would likely attract significant attention near the psychological round number and a range of corresponding trading activity on the chart stretching back to mid-October.
Finally, a more bullish move in Netflix shares could see the price climb to $1065, a location on the chart where investors may seek profit-taking opportunities near the stock’s record high.
This area also sits in the same neighborhood as a projected bars pattern target that takes the trend higher that immediately preceded the descending channel and repositions it from last week's low, with the analysis speculating how a potential continuation move in the stock may play out.
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