Netflix Cracks The Trendline: What Could Be Next?

Netflix Inc. NFLX shares are trading higher Tuesday, continuing the momentum from Monday after the company signed a deal to get Steven Spielberg's new movies on the platform.

Spielberg’s production company Amblin Partners signed a deal to make several movies for the streaming site in the coming years. No financial terms were disclosed in the deal.

Netflix was up 2.8% to $511.21 at publication time. Below is a technical look at the chart.

Netflix Daily Chart Analysis

• Shares have been trading in what technical traders call an ascending triangle pattern. Shares look to have fallen below the higher low trendline, which makes bearish moves a possibility.
• The stock is trading above the 50-day moving average (green), but below the 200-day moving average (blue), indicating the stock is likely in a period of consolidation.
• The 50-day moving average may hold as an area of support, while the 200-day moving average may act as an area of resistance.

Key Netflix Levels To Watch

• The stock fell below the higher low trendline in the ascending triangle pattern, which could be a sign of caution for traders. A cross below this trendline can sometimes bring about bearish moves.
• The stock needs to get back above the higher low trendline for bulls to continue to maintain control in the stock.
• The higher low trendline is building up to a previous resistance near the $575 mark. This level is somewhere the stock struggled to cross above in the past.

What’s Next For Netflix?

Bullish technical traders would like to see the stock get back above the higher low trendline and then continue to hold the trendline all the way up to the flat top resistance. If the stock can break above the $575 mark and hold above the level, it may see another bullish push.

Bearish technical traders would like to see the stock continue to trade below the higher low trendline. If the higher low trendline starts to hold as resistance, the stock may be ready to see a strong drop.