Market Minute: Netflix Rallying Into This Afternoon’s Earnings as Mixed Market Dawns
The streaming entertainment giant Netflix (NFLX) is due to report earnings after today’s close as a capstone to the holiday-shortened trading week, with traders awakening to a mixed day in which the broader market is holding up, but UnitedHealth’s (UNH) -20% premarket earnings plunge is dragging down Dow futures (/YM) more than -1.5%.
Netflix has weathered the recent turmoil generated by tariff news better than much of the rest of the stock market and is still showing a +56% gain during the past year while the S&P 500 (SPX) has gained only +5% during the same time period. Shares have fallen about -9% from their all-time highs of 1,064.50 on Feb. 14, but price on Tuesday broke above a downward-sloping trendline that began at those highs.
The retest of this old resistance level held up yesterday and the rally seems to be continuing with a +1% premarket move. Momentum also showed an accompanying breakout, as the Relative Strength Index (RSI) not only broke above its own matching downward trendline, but also took out the 50 midline that suggests a shift toward bullish momentum.
For potential resistance, price must now work its way above a volume node between about 965-985 before another noteworthy zone near 1,000. This area is not only the next set of relative highs, but also coincides with the yearly Linear Regression Line (line of best fit) that suggests an idea of “fair value.” Afterwards, there is little that stands in the way of the all-time highs.
To the downside, the old high points from early April near 950 match up with the low points after the recent gap to the upside, which suggests a potentially supportive area. This also approximately matches up with the previously mentioned downward trendline beginning at the all-time highs, so this area could be a potential foothold for the bulls. Beyond that, the 21-day and 63-day Exponential Moving Averages are clustered together right around 934. However, keep in mind that with the Good Friday holiday tomorrow, markets won’t get to react until Monday morning.
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