Could Earnings Mean Full Stream Ahead For Netflix Stock?

Netflix Inc NFLX is set to prints its second-quarter 2021 earnings after the bell on Tuesday and the focus will be on whether the streaming company has been able to increase its subscribers.

When the company printed its first-quarter earnings on April 20 its subscriber miss overshadowed its revenue beat and the stock sold gapped down over 7%.

Netflix plans to increase its customer base and revenue through expanding into the video game market and on Wednesday it was confirmed the company had hired Mike Verdu as vice president of game development.

Verdu, a heavy hitter in the gaming industry, was formerly vice president of Electronic Arts, Inc’s EA EA mobile and a gaming executive at Facebook Inc FB.

Netflix has lagged other big tech so far this year, unable to trade back near its all-time high of 593.29 made Jan. 20. Traders and investors will be interested not only to see how Netflix faired in terms of its numbers, but whether more information or guidance is given in relation to the company’s foray into the gaming industry.

See Also: Netflix, Disney, Amazon Battle It Out As Bollywood Films Opt For 'Digital Premieres' Over Theater Releases

The Netflix Chart: Netflix’s stock has spent most of 2021 trading sideways between $484 and $557. Last Thursday, the stock attempted to break above the $557.39 mark again but was knocked back down under it. On Monday, Netflix almost filled the remainder of the gap that was left behind following its first-quarter print which should give bulls more confidence going forward.

On Friday, Netflix lost support of the eight-day and 21-day exponential moving averages (EMAs) and on Monday the eight-day EMA acted as resistance when the stock attempted to bounce. The eight-day EMA is trending above the 21-day EMA, however, which is a good sign for the bulls. Netflix is also trading above the 200-day simple moving average, which indicates bullish overall sentiment.

Bulls want to see a bullish reaction to earnings and for big bullish volume to come in and drive Netflix up over the $557 mark. If it could regain the level as support, Netflix’s stock could make a run back toward its all-time high.

Bears want to see a bearish reaction to Netflix’s earnings print and for bearish volume to drive Netflix back down below support at $531.73. If it loses the level as support, it could fall toward $510.

NFLX Price Action: Netflix traded down 1.3% to $525.22 at publication time.