Netflix in Correction, but Still Huge 2018 Leader

Video streaming giant Netflix, Inc. reported quarterly results after the close on Jan. 22 and did not disappoint. The stock closed Jan. 22 at $227.58 and opened Jan. 23 at $255.05 for a 12% price gap higher. This upward momentum was consolidated, with the stock trading as low as $236.11 on Feb. 9.

Momentum rang supreme from that low, as the stock rallied 41% to set its all-time intraday high of $333.98 on March 12. At the high, the weekly chart showed that momentum (12 x 3 x 3 weekly slow stochastic) was above 90 on a scale of 0 to 100, so the chart indicated that Netflix stock was in an “inflating parabolic bubble.”

At Monday’s close of $280.29, Netflix stock is up 46% year to date but is also in correction territory at 16.1% below its March 12 high of $333.98. The shares are up 18.7% since the Feb. 8 low of $236.11. The stock was around my quarterly pivot of $247.78 in pre-market trading this morning. Recent share price weakness has been caused by nervous investors concerned about a potential trade war with China. (See also: Netflix Sell-Off Could Signal Deep Correction.)

 

Netflix is not a value stock, as its P/E ratio is elevated at 236.28, and will likely lose its classification as a momentum stock this week. …read more

Read more here: Netflix in Correction, but Still Huge 2018 Leader

Category: NFLX

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