Netflix shares have continued to decline since mid-July, losing more than 22% in value. On September 11, the emitter’s quotes fell to an 8-month low. Shares are pressured by the news about the launch of Apple’s new Apple TV+ streaming video service in early November with a cost much lower than that of competitors, Netflix and Walt Disney Co.
Over the past week, Netflix shares showed a 1.11% decrease in value. S&P500 went up by 2.15% within the same period.
If the price consolidates below the support level of 284.00, the company’s shares may decline. Potential profits should be locked in by orders at 270.00, 260.00, and 250.00. Stop loss – 297.00.
If the price consolidates above the level of 300.00, one may consider buying #NFLX. The target movement level will be 320.00–330.00. Stop loss – 287.00.
Implementation period: 3 days.
Support and resistance
The company’s quotes have stabilized after a significant decline over the past two months. At the moment, #NFLX shares are consolidating. No single direction tendencies are observed. The key trading range is 284.00–300.00. The instrument has the potential to further decline.
Indicators show opposing signals: the price has consolidated below MA(50) and MA(200), and MACD shows positive dynamics. Positions are to be opened from key levels.
Comparing the company’s multiplier with its competitors in the industry, we can say that Netflix shares are overvalued.
Support levels: 284.00, 271.00, 251.00.
Resistance levels: 300.00, 316.00, 336.00.
Stock Market Morning Report
European currency showed a steady decline against the US dollar on Wednesday, updating local lows of September 4. Investors corrected their open long positions on EUR before the ECB meeting on monetary policy. It is expected that the European regulator can go for an additional reduction in the deposit rate from –0.4% to –0.5% and keep the key rate at zero level. In addition, the ECB is expected to take other steps aimed at stimulating the European economy. In particular, the head of regulator Mario Draghi previously actively discussed the possibility of resuming the quantitative easing program. The ECB activities are likely to affect the decisions of other regulators. In particular, the Fed and the Bank of England are expected to hold meetings next week.
The British pound is showing ambiguous dynamics paired with the US currency, consolidating near its local highs, updated at the beginning of the week. Investors are still focused on the Brexit situation. The day before, it became known that Scottish appeal court found that Boris Johnson suspended the Parliament unlawfully. The government, in turn, noted that they were disappointed with such a court decision and would appeal it to the Supreme Court. During today’s Asian session, the RICS Housing Price Index provides some support for the instrument. In August, the indicator fell by 4% MoM after a decline of 9% MoM last month. Analysts had expected a significantly sharper decline of 11% MoM.
The Australian dollar closed trading on Wednesday with ambiguous dynamics against the US currency. The instrument was under pressure from weak macroeconomic statistics from Australia. Westpac Consumer Sentiment in September showed a decline of 1.7% after rising by 3.6% last month. At the same time, American statistics came out better than the forecasts. The Core PPI in August showed an increase of 0.3% MoM after a decrease of 0.1% MoM in July. In annual terms, the indicator accelerated from +2.1% YoY to +2.3% YoY, while analysts expected +2.2% YoY. MBA Mortgage Applications for the week as of September 6 strengthened by 2.0% after a decrease of 3.1% over the past period. During today’s Asian session, the Australian dollar is showing strong growth, updating local highs from July 31. Support for the instrument is provided by Donald Trump’s decision to postpone the introduction of regular import duties on Chinese goods from October 1 to October 15.
The US dollar continues to grow steadily against the Japanese yen, updating local highs of August 1. Support for the US currency is provided by moderately optimistic macroeconomic statistics on industrial inflation in the United States, published the day before. In addition, a slight improvement in the prospects for future US-Chinese trade negotiations contributes to increased demand for risk. China announced the abolition of part of import duties on American goods, and Donald Trump in response announced the postponement of the introduction of new increased duties. Thus, the market has received confirmation that the parties are preparing for a new round of negotiations in October and are interested in ending the conflict. Statistics from Japan published during today’s Asian session turned out to be contradictory and did not provide significant support to the yen. The PPI in August fell by 0.9% YoY after a decline of 0.6% YoY last month. Analysts had expected decline by 0.8% YoY. Core Machinery Orders in July fell by 6.6% MoM after growth of 13.9% MoM last month. Analysts had expected the decline of 9.0% MoM.
Oil prices fell significantly on Wednesday, retreating under the onslaught of the rising USD and the publication of a report from the US Department of Energy. According to the report, over the week as of September 6, Crude Oil Inventories fell by 6.9M barrels after a decrease of 4.8M barrels over the past period. Analysts had expected a decrease of only 2.6M barrels. At the same time, the oil refining capacities grew by 0.3% and reached the level of 95.1% against the forecast of a decrease of 0.6%. US oil production remained unchanged at 12.400M barrels per day.
Evidence-based financial writer with 9 years of experience specializing in earnings, economic data coverage, and bond markets. I combine fundamentals, technicals, and macro to identify low-risk, asymmetric opportunities.