Netflix Technical Analysis (NASDAQ:NFLX)
Technical analysis is the study of technical chart patterns and does not rely on the financials of a company. Just by looking at the Netflix stock price one can't take a trading decision. A trader needs to find a chart pattern, which is a clear cut pattern formation on the NFLX stock chart which creates a trading signal.
You can view Simple Moving Average (SMA 20 day, 50 day & 100 day), Exponential Moving Average (EMA 20 day, 50 day & 100 day) charts, and Bollinger Bands for Netflix. Technical analysis essentially tries to study the supply and demand for a particular security and determine the stock trends for that security. Chartists use stock price movements for this form of Netflix stock analysis.
Netflix Moving Average:
Moving averages show the average price of NFLX stock over a set time period and help traders see the overall trend by smoothening out the daily variation in price movement. A rise in trend over the long term indicates a long term uptrend. Similarly a falling NFLX moving average implies that Netflix stock price is falling.
Netflix Bollinger Bands:
Bollinger bands consist of two price bands above and below a center line for any company stock like Netflix. The tightening of bands is considered by most traders to be a precursor to sudden increase in volatility. The stock price is trading between the average and the lower band in the context of Netflix bollinger bands.
Netflix Moving Average Convergence Divergence or MACD:
The moving average convergence divergence or MACD is a technical indicator which helps gauge the stock price trend, as the indicator is useful in understanding the strength, direction and momentum of the stock price. The Netflix MACD indicator is below 0 indicating a bearish trend.
Netflix Relative Strength Index:
The RSI technical indicator is a momentum oscillator. It compares the speed and change in price movements. If the RSI of NFLX stock goes above 70 it could indicate an overbought condition, and if it goes below 30 it could signal an oversold position. .