Netflix Analysis: Key Levels and Trading Outlook 2024.12.29Hello, this is Greedy All-Day.
Today’s analysis focuses on Netflix (NFLX).
Weekly Chart Analysis
Looking at the weekly chart, Netflix is currently consolidating within the 884–944 range, which represents about a 5% range of sideways movement. This consolidation has lasted for approximately one month.
Since the sharp decline in 2022, Netflix has been following a newly established ascending trendline, which remains intact and shows no signs of breaking.
Key observations:
Netflix has climbed approximately 35% beyond its all-time high in 2021, reaching new highs.
However, the price is now in a consolidation phase, which raises the question: is Netflix preparing for further upside, or is this a period of rest before a potential pullback?
If this sideways movement continues for an extended period, a trendline breakdown may occur. Based on current prices, this breakdown is projected around July 2025.
Weekly Chart with Indicators
When we include indicators such as the 60 EMA, we notice that it aligns closely with the ascending trendline. This alignment increases the reliability of the trendline as a key support level.
However, at this point, entering a new long position appears less attractive due to the following reasons:
Netflix has already risen 35% beyond its previous high of $700, making it difficult to justify additional upside based solely on past data.
Without historical data to support further gains, investors would likely rely on fundamental analysis and the belief that Netflix is undervalued as a company.
Ideal Buy Zones
Where are the best entry points for a buy position?
While Netflix’s current uptrend may suggest continuous growth, corrections are inevitable, even for large companies. Based on this, I’ve identified two potential buy zones marked as blue boxes on the chart:
First Buy Zone: $700
This level was the all-time high in 2021, which now acts as support after being broken to the upside.
Even if the price drops, it’s unlikely to fall below $700 easily, as this level is supported by the ascending trendline from 2022.
Second Buy Zone: $350
The first green box shows a sharp drop followed by a temporary rebound.
The second green box highlights a key support level that held during a previous consolidation phase. Both zones indicate strong support and potential for a bounce.
Reversal and Sell Perspective
The red box zone highlights an area for potential reversal or sell positions.
If Netflix breaks the $700 level and the ascending trendline, it would signal a significant shift toward a bearish trend.
A breakdown below $700 could lead to a sharp decline, with the first buy zone ($700) and second buy zone ($350) representing a potential 50% difference.
This suggests that a trendline breakdown could trigger a substantial bearish reversal, making short positions or hedge strategies worth considering.
Conclusion
While Netflix has demonstrated strong upward momentum, history shows that even the largest companies can experience corrections of 70% or more.
Instead of chasing continuous rallies, it’s crucial to consider both bullish and bearish scenarios and plan trades accordingly.
Let’s make 2025 a successful trading year together. 🚀
