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Netflix (NFLX) Stock is the ‘Chart of the Day’
TheStreet’s Chris Versace and Bob Lang said they may tilt the odds in favor of Netflix (NFLX) bulls.
By Kaya Yurieff
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NEW YORK (TheStreet) -- Shares of Netflix (NFLX) - Get Report are dropping 2.71% to $94.05 in early afternoon trading on Tuesday after Needhamcut its rating on the stock to "hold" from "buy."
The firm said Netflix's exposure to Europe should accelerate subscriber churn or slow subscriber growth.
Separately, the stock was added to the "Best Idea List" at Guggenheim earlier today. The firm reiterated its "buy" rating and $150 price target, the Fly reports.
TheStreet'sChris Versace and Bob Lang of Trifecta Stocks have identified Netflix as the "Chart of the Day." Here is what Versace and Lang had to say about the stock:
There are so many converging patterns on the Netflix chart that it makes me wonder what direction this may be headed. Let's take a look at these one at a time and see if we can find the strongest evidence for a direction.
The double bottom in May/June is evident and gives up confidence a bottom has been tested and held. That is a positive.
Friday's surge was stoked by an upgrade from Canaccord to strong buy. For the stock to move 5% and hold gains the entire day is a good sign for the bulls, and one more move up confirms the uptrend is intact. The moving average convergence divergence (MACD) is just about on a bullish signal.
It's not all rosy, though. We can see Netflix is bumping right up against a downtrend line. If it turns down, there will be yet another lower high on the chart and Friday's gap may be filled in short order.
The gap from April also looms as resistance, as does the 200-day moving average. So far, not even the short-term moving averages have turned upward. Time may work in their favor.
At this point, we might tilt the odds in favor of the bulls here, but only due to the solid relative strength vs. the market.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in net income.
But the team also finds weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: NFLX