Important points
Netflix (NFLX) stock soared in after-hours trading on Tuesday after the streaming giant reported better-than-expected fourth-quarter results and raised its 2025 revenue outlook.
Investors also welcomed the streamer’s decision to increase subscription prices in the US, Canada, Portugal and Argentina. The company added 19 million net new subscribers in the fourth quarter, bringing its membership to more than 300 million.
Through Tuesday’s close, Netflix stock had risen 80% over the past 12 months, significantly outpacing the S&P 500’s return of 25% over the same period. Shares rose 14% in after-hours trading to nearly $995.
Below, we take a closer look at Netflix’s chart and use technical analysis to point out key post-earnings price levels worth noting.
Stock price hits bottom on 50-day moving average
After hitting an all-time high in early December, Netflix stock has rallied 13%, with bulls pushing the stock just below its 50-day moving average.
Although stocks failed to close above popular indicators ahead of quarterly results, trading volume hit its highest level since mid-October, with some large market participants raising concerns about post-earnings volatility. This suggests that they were preparing for the
Let’s take a look at Netflix’s chart to predict how the stock’s new uptrend will play out, and also identify two key support levels worth keeping an eye on during a pullback.
Bar pattern analysis
Investors can infer how new uptrends will form by applying bar pattern analysis, a technique that studies previous trends to predict future price movements.
When we apply this tool to the Netflix chart, we take the price bars that make up the stock price trend from August to December of last year and overlay them from this month’s low.
This analysis projects a potential upside target of around $1,285, indicating that the new trend could continue into late May if price action is in line with last year’s gains. . We chose the previous trend because it was just after a correction of more than 10% and was poised for a similar move to recur after the recent stock decline.
Key support levels to look out for
During the retracement, investors should initially closely monitor the $930 level. This area is likely to attract strong buying interest around the narrow consolidation range formed just below the stock’s all-time high (ATH) on the chart, with a potential reversal from resistance area to support. There is.
Finally, a close below this level opens the door to a more significant decline to around $824. Investors may try to pile up stocks in the region near the trend line between the mid-November lows and this month’s lows.
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As of the date this article was written, the author did not own any of the securities mentioned above.
