This might be your favourite company as you may like to watch Netflix a lot. But is it a good time to buy this stock?
Let us take a look at the stock charts and see what it is telling us.
We start by looking at the daily chart of Netflix. As you can see, the stock had a really very nasty sell off. Whenever that happens, you will need to take a look at the long term charts in order to spot a possible long term support.
A positive thing for the stock is that is has gone back above the daily 20 MA. That will be the red line on the chart. Notice during the sell off, it was trading below that moving average for a long time. It is only recently that it went back above the 20 MA.
The stock is trying to move back above the 50 MA and if that happens, this will be another positive thing for the stock.
We need to take a look at the monthly charts.
The stock is quite oversold in the monthly chart. The stochastics is oversold and this could hint of a possible bullish reversal back up. What is good about the monthly chart is that it shows us that the stock is finding support at the monthly triangle tip.
Netflix broke out of a monthly triangle back in 2020. The tip of the triangle can be a support area and that is where Netflix stock is at the moment. I have coloured the area green. Netflix may also be making a monthly bottoming tail. With only one more day to end the trading month of March 2022, it is very likely that the bottoming tail will materialize.
The presence of a monthly bottoming tail could hint of a bullish reversal in the stock. Since the stock is at a monthly support, it may be a good time for long term believers in Netflix stock to nibble and buy the stock.
If you buy now it is not like you are catching a falling knife. There is solid support below.
For short term traders, we will need to take a look at the 2 hour chart of the stock. The stock broke above a downtrend line recently and this hinted to some bullishness in the short term.
Yesterday it broke out of a 2 hour consolidation. I have drawn a box over the trading range. We can take the box as a short term gauge of what the stock might be doing. As long as the stock stays above the lows of the box, then it is likely to grind higher. However, if it drops below the box, then we might see more weakness.
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