Netflix surprised everybody yesterday with their revenues report, which overshot estimates by 134.75 million (1.33%) – adding 19 million new subscribers in the final quarter of the year.
With the release of the international hit series: “Squid Game” Season 2 during December on Netflix, perhaps this surprise shouldn’t have come as a surprise at all. Either way, the Netflix stock (NFLX) is now projected to open pre-market at roughly $1,000 – a whopping number!
So, with that in mind, what should traders be looking for today on NFLX?
Tip: Use the Fibonacci Level to Find Potential Support
Should the Netflix price open at $1,000 today, a retracement could occur soon after. This is where using the Fibonacci Retracement Tool would offer us new places to watch for a long entry.
Using $1,000 as our projected swing high, and the bottom of the recent low at $823.63 as our swing low, we find two key levels to pay attention to:
- 38.20% Fib Support at ~$932.63
- This level aligns with the previous all-time high at $935.
- 61.80% Fib Support at ~$891.00
- This level aligns with a previous low at $886.61, formed on December 19th, 2024.
Traders should also watch for the possibility of a classic bearish divergence forming. This would signal a potential reversal after the markets open at around $1,000.
- Happens when the price forms a higher high, but momentum (RSI) forms a lower high.
- The previous RSI major high is at 88.50, so the momentum should surpass that number to invalidate the bearish divergence.
Will Netflix Continue its Uptrend?
Finally, it’s important to notice that Netflix has been consistently respecting the 20 EMA, as soon in the example above with a Bollinger Bands®, set to EMA-20 and 1 standard deviation.
As long as the price remains above the 4H Bollinger Bands (EMA 20) and does not fall below its 1-Standard Deviation bands, Netflix should continue in its uptrend.
You may also be interested in:
