Netflix (NFLX) reports earnings after the close today. A stock that has been an absolute bear killer for the last several years could finally be ready for a significant correction:
The monthly chart of NFLX shows a stock that is almost vertical in the steepness of its ascent with 4 consecutive monthly closes above the upper Bollinger Band (including this month) which makes for the longest streak since 2010 (which incidentally preceded a solid red month in December 2010).
Meanwhile, the daily chart illustrates a stock that has made the majority of its recent gains (NFLX has more than doubled during 2015) by way of overnight gaps:
The new highs of the last month have occurred on fading momentum and the volume profile shows a large number of distribution days. Next major support exists around the $91 level with open gaps below at $83.94, $67.92, and $49.83.
“Wall Street consensus estimates are for earnings per share (EPS) of $0.32 on revenue of $1.645 billion. However, the Estimize consensus estimates of $0.44 EPS on $1.654 billion in revenue are even higher. The question that many traders are asking themselves today is this one: are Netflix expectations so high that it will be impossible to meet them?“
Simply judging by Wall Street sell-side analysts virtually unanimous bullish view of NFLX and the fact that the stock is the best performer in the S&P 500 during the 1st half of the year I would say it’s time for investors to cash in their chips on NFLX: