Shares caught a lift on Thursday on news that the company was reportedly planning a push into streaming video games.
The stock hit multi-month highs on the day as a result, but so far Netflix shares have been unable to hold onto those gains.
That’s as the company has received some favorable analyst commentary and announced expansion deals for new content in the last few weeks. One of those deals was with Steven Spielberg's Amblin Partners.
When the stock was below $500, we were looking at Netflix for the potential of a rotation higher.
Well we got that rotation and then some, with shares pushing above $550 in each of the last two days. That said, Netflix failed to close over that mark on Wednesday and is fading hard from it on Thursday.
So where does that leave the stock now?
In mid-June, shares pushed through the 50-day, 21-week and 200-day moving averages in just four sessions. It was an impressive showing.
Now, bulls will expect the stock to find some support from its trending moving averages. Specifically, the 10-day moving average.
This measure provided support last week. Should we see a slight decline from current levels, Netflix not only has the 10-day moving average on its side, but it will be retesting the June high near $536.
Between both levels, there should be some support. If not, a pullback down to the 21-day moving average currently near $525 may be in order. Below that and some of the major moving averages near $515 come into play.
On the upside, let’s see if shares can close above $550 and take out this week’s high. Above $557.50 puts the second-quarter high in play near $563.50, followed by the $575 level.