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Fan Yang

Netflix (NFLX) Completes an ABC Correction and Tests Support Above $270

Netflix $NFLX has been in correction mode apparently since cracking $420 back in June and July. After a double top (seen in the daily chart), we can see that price action has now completed an ABC correction where wave C = wave A in length. 

Netflix (NFLX) Daily Chart

(click to enlarge)

Bearish Correction:
- It is obvious by now that NFLX is in a significant correction mode. 
- Price has fallen below the key moving averages.
- The RSI has fallen under 30, and since held under 60, which reflects maintenance of the bearish momentum. 
- But after a 30-35% correction since mid-year, the previous support pivot above $270 might hold in the short-term.
- We should probably anticipate some bounce back towards $300, where we should then anticipate resistance. Above $300, the next key resistance will be $340. 
- During this correction mode, I don't think price can climb back above $340.
- If price does climb back above $340, we might be able to assess the $270 area as the bottom of the current consolidation. 

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