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Fan Yang

Netflix Testing Common Resistance Around $387; $420 Could be Next

Netflix $NFLX was in a correction in 2018 that started in June from a height around $423 down to a low just above $230 in late December. But since then, price has recovered. 

NFLX Daily Chart

(click to enlarge)

Consolidation Resistance:
- The daily chart shows how price rebounded sharply in early 2019. 
- But since price pushed above the 200-day simple moving average (SMA), NFLX slowed down its rally.
- Eventually, price started to consolidate sideways with support at $340 and resistance around $380-$387
- We can see that price held above the consolidation support, which was also right around the 200-day SMA. This is a bullish sign.
- Also, the RSI held mostly above 40 after it pushed above 70 earlier in the year. This is also a sign that bulls are now in control.
- Thus, unless the overall market starts slide sharply, I think there is a strong likelihood that NFLX will break above the $387 resistance and open up the $420-$423 resistance.
- A break below $360 on the other hand would signal further consolidation. But I would still anticipate support around $340. 
- At the moment, I have entry orders at $365 and $325. 

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