Chart of the week: Netflix shares in focus

TL;DR

Netflix is showing signs of a major downside reversal, indicated by a completed five-wave pattern and strong momentum divergence.

Transcript

hello it's John Burford with chart of the week for Tuesday the 26th of May and I'm covering Netflix today this is of course one of the components of the famous Fang gang and it has enjoyed an absolute rocket ride certainly up to the the high in 2018 this is the weekly chart it shows a very clear v wave pattern wave 1 wave 2 long and strong wave 3 a... Read More

Key Insights

• 👋 Netflix's weekly chart indicates a completed five-wave pattern, suggesting a potential downside reversal.
• ✋ The spike to the all-time high after positive results may signify a buying climax and a possible reversal.
• ✋ The rally in high-tech giants, including Netflix, has reached the same region as the February high, potentially forming a double top.

Questions & Answers

Q: What pattern is seen in Netflix's weekly chart?

Netflix's weekly chart displays a V-wave pattern, with a clear five-wave pattern in the final wave 5.

Q: What does the spike to the all-time high suggest?

The spike to the all-time high, following positive results, suggests a buying climax and potential reversal.

Q: How does the rally in high-tech giants compare to general US companies?

The rally in high-tech giants, represented by the Fang group, is much stronger compared to the recovery of general US companies, as shown by the Russell 2000 index.

Q: What level is crucial for Netflix's potential downside move?

Just under the 400 area is an important level for Netflix. If the market breaks that level, it is likely to reach the 300 level.

Summary & Key Takeaways

• Netflix's weekly chart displays a clear V-wave pattern, with a completed five-wave pattern in the final wave 5.

• The spike to the all-time high, following positive results, suggests a buying climax and potential reversal.

• The rally in high-tech giants, including Netflix, after the March crash has reached the same region as the February high, indicating a possible double top and reversal.