After Netflix (NFLX) - Get Netflix, Inc. Report took a dive Monday after Disney's (DIS) - Get Walt Disney Company Report reported interest in various Fox (FOXA) - Get Fox Corporation Class A Report assets, it's time to hit up the charts.
Taking a look at Netflix, we choose a chart that dates back to July 2016, as that is when the last significant change in trend occurred. I have skin in the game here, so this is real analysis by someone who gives a darn, in case that matters to you. Obviously, despite the fact that Disney intends to pull its content in 2019, the stock has not been negatively impacted in a significant way.
That said, it is with an eye toward ringing the register that I look at this one, despite its recent crushing of expectations for both domestic and global additions. First off, we look at relative strength. It's healthy, but not uncomfortably so. Money Flow? Again, positive. It has shown some weakening, but not enough to get the small investor nervous, in my opinion.
The moving average convergence divergence (MACD) looks interesting. See that 12-day exponential moving average (EMA)? The upward curl looks like it could be on the verge of sending a short-term bullish signal, with a nine-day EMA close enough to zero. I like that as a trader.
Once we super-impose the pitchfork, you can see that the central trendline has offered resistance for several months, while not the lower trendline, but the 50-day simple moving average has been valid support for just about as long. Do I think it's time to get out of this name? No. Am I sure? No.
This is where I care:
-- Aggressive Target Price: $229;
-- Target Price: $209;
-- Point of Concern: $187;
-- Stop Loss: $182.
(This is an excerpt from Stephen "Sarge" Guilfoyle's Morning Recon, which now appears exclusively on Real Money, our premium site for active traders. Click here for a free 14-day trial and receive Morning Recon every day, along with exclusive columns from Jim Cramer, James "RevShark" DePorre, technical analyst Bruce Kamich and more.)
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At the time of publication, Stephen Guilfoyle was long NFLX, although positions may change at any time.