Netflix, Inc. (NASDAQ:NFLX) stock is trading close to a key resistance zone, a breakout above which could see shares rally to $110, technical charts indicate.
Netflix was S&P 500’s best performing name of last year, hitting a life time high of $131 on December 4. But a swift change in trend saw shares tumble a whopping 37 percent in less than 2 months to a low of $83 on February 5.
Netflix Stock is “Interestingly” Poised
A look at the daily price chart of Netflix, Inc. shows the stock has smartly bounced back from the lows of last month. But $102 is proving to be a difficult level to conquer. An attempt was made during the first week of March. However, in the face of heavy selling pressure, bulls caved in, sending shares lower.
Now, as Netflix prepares for another crack at climbing past this key resistance area, traders need to have the stock on their watch lists. A convincing close above $102, on decent volumes, should unlock further upside in the stock.
For the breakout to materialize, and the stock to follow through, the broader markets must continue to show strength. But given the current bout of volatility, traders wishing to initiate long positions should place a protective stop loss to preserve capital in the event of the trade going wrong.
Shares of Netflix, Inc. (NASDAQ:NFLX) ended last week at $101.12, up 1.4 percent for the session.
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Current Stock Market Rally has “Legs”
After a woeful start to 2016, stocks markets look set to continue their move higher, according to one top analyst.
“I think there’s a little more room to run here on the S&P 500,” Stephen Suttmeier, Bank of America Merrill Lynch chartist, told CNBC. “We’re going to stay very short term positive.”
Suttmeier reckons that as long as the S&P 500 trades above its 200 day moving average, the uptrend is intact. The index broke above its 200 MA for the first time since January in last week’s trading.
Suttmeier says 2,085 is the next critical level for the S&P 500. “Should we stall somewhere ahead of 2,085 and break that 200 day moving average…I think the bears can come back into the S&P. For now…stay tactically positive.” he added.
U.S. equities soared to year to date highs after last week’s dovish comments from Federal Reserve Chair Janet Yellen eased investor concerns about an imminent interest rate hike. Major indices recorded their longest weekly winning run since the fall of last year.
S&P 500 closed Friday at 2049.58, up 0.4 percent.