Netflix, Inc. (NFLX)

Netflix stock forecast: buy or sell

Netflix stock outlook

  • Netflix closed on Friday at $494.73 after sinking a -2.82%.
  • Netflix, Inc. provides subscription streaming entertainment service. It offers TV series, documentaries, and feature films across various genres and languages.
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Please read:
The viewpoints expressed in this article are personal and should not be followed as recommendations for you to buy or sell shares. The author of this paper does not know the specific scenarios of the reader, his or her own finances or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Viewpoints are published for educative motives only

Netflix stock chart overview

Should I buy Netflix stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is NFLX stock a buy?

Currently, Netflix stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean NFLX will slide in coming sessions, or it will not rise higher. Simply, it doesn't match our recommended trading systems

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Should I sell Netflix stock?

When is it time to sell Netflix stock?. Trading strategies give us the ability us to avoid impetuous decisions based on our sentiments or the buzz that surrounds the market. When selling, as well as buying, our setups are very simple to follow and are only valid for selling stocks you already own, not for shorting Netflix stock

A golden rule is that you should not mantain an operation that produces greater losses than those expected upon purchase. The moment to sell your stock must always be dictated by the stop-loss (automatic or manual)

Is it time to sell Netflix stock?

Currently, Netflix stock doesn't match any of our preferred sell setups, so if you hold Netflix shares and your operation is in profit probably is not time to sell now

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Analysts' recommendations to buy or sell Netflix stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last month, just one rating was published for Netflix

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Netflix ratings

Brokerage firmRating
Jul 29th, 2020
Loop Capital Strong buy

Technical analysis

SMAs overview

A favorite tool of many trading systems are the moving averages, that easily show market momentum. A moving average is the average price of a stock over a set period of time. Moving averages are usually calculated on different periods depending on the trading timeframe 21, 50, 100 and 200 days are the most usual moving averages

Supports and resistances

Traders use supports and resistances as a way to spot price points on a chart that tend to work as glass ceiling, containing the price of shares to move in certain direction. Supports are levels where the price may stop as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. Nevertheless, if the price breaks down this level, it will probably continue falling until meeting another support level. In contrast, resistances are where the price tends to find a curb as it moves up. In the same manner, the price is more likely to "bounce off" at this level, and if it finally breaches this level, it will rally easily until it approaches the next resistance

The current resistance levels are:

  • R1: $510.82 (3.25% above)
  • R2: $575.37 (16.3% above)
  • The current supports are:

  • S1: $467.54 (-5.5% below)
  • S2: $458.97 (-7.23% below)
  • S3: $449.52 (-9.14% below)
  • Bollinger bands

    This is an indicator that was created in the 1980s by John Bollinger. Basically, the Bollinger Bands are bands that flow around a centralmoving average, varying the distance from the bottom to the top depending on market volatility. They are usually plotted by an offset of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Relative strength index

    The relative strength index (RSI) is a technical indicator used in the analysis of financial markets. Its objective is to plot the current and past weakness or strength of a stock or market based on the closing prices of a recent trading period. Like other oscillation indicators, the RSI ranges between 0% and 100%. The relative strength indicator is one of the best known and most widely used indicators, invented by J. Welles Wilder in the late 1970s

    The RSI dropped below the overbought level of 70 on July 13 after just crossing to the overbough zone for 1 day (weak signal). The RSI value on Friday was 51.67. Since RSI lost the overbought zone, Netflix stock tanked a 9.84%

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    Earnings and financials

    Netflix, Inc. (NFLX) posted adjusted EPS for the fiscal 2nd-quarter that lowered Wall St. expectations. Quarterly EPS was $1.59 per share instead of $1.81. This Q2 report means an earnings surprise of -12.15%. On the contrary, reported sales were $6.1 billion, in line with analysts' estimates.

    This compares to earnings of $0.60 per share same quarter last year, so current EPS means a gain of 165%. Looking at sales, figures exploded a 24.97% compared to $4.9B same quarter a year ago. Netflix made 3 YoY quarterly positive results, improving sales by 106.32% from $3.0B on 2017-Q3.

    Netflix is posting Q3 financial report next October. Wall Street analysts predict a per-share earnings of %s of $2.12, that is a 33.33% more than previous quarter. If you own or you are thinking of buying Netflix stock, you must be aware that earnings reporting day usually has a very high volatility, and price can gap up or down with very low liquidity and not honouring your buy/stop-loss orders. Have a look company's website to confirm time and details on the earnings call and the earnings report.

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