Stock of the day: Netflix
19 April 2023
Today, we will discuss the technical situation on Netflix who published their results after yesterday’s session close. Firstly, EPS came better than the consensus (2.88 vs 2.86). The Q1 revenue, in contrast, was below the expectations (8.16B vs 9.17B). What scared the investors was the global streaming paid net additions of 1.75 million, instead of the 2.41M expected. The company is also awaiting lower-than-expected revenue for Q2. These numbers wreaked havoc in the after-hours training, where Netflix shares were 11% down. The situation looks much better now, showing only a 1% drop.
Technically, a slide following the earnings report can have a chance to finish the big head-and-shoulders pattern (yellow). The formation itself would be good for the start, but could not seal the deal yet. For the proper sell signal, we would have to see a breakout of the neckline (green) and the long-term up-trendline (black).
In case the buyers dominate the market despite the disappointing forecasts for the Q2, a technical buy signal would be created if a breakout of the blue horizontal resistance happens. Chances of that are now rather limited and a decline towards the up-trendline seems more probable.