By: Yesoption
Netflix, Inc. (NASDAQ:NFLX) has constantly been in the news ever since the Federal Communication Commission (FCC) started looking at the issue of “open internet”. Many believe if new proposals by the FCC get the nod in Congress, the FCC would be allowed to regulate the flow of speeds between internet service providers and content providers.
Many users have complained to the FCC with regards to their internet speeds while they were visiting sites like Netflix. The regulation proposal by the FCC would create an open environment in which all traffic will be treated equally and not based on certain premium deals between ISP providers and content providers. This is being seen as tremendously positive by analysts for a company like Netflix for the long-term.
When looking at the daily chart for Netflix, the stock currently caught in a strong downwards trend, spanning quite a few weeks. It broke below its daily moving average, which many experts find concerning.
Netflix has found some semblance of support near the $340 level, with resistance near the $415 line, which happens to be its 200-day moving average. Meanwhile, its momentum indicator is showing the first sign of a potential reversal creating a buy signal on the chart, which clearly displays build-up of buying interest at current levels. Finally, the relative strength index is indicating buy, which is a bullish sign.
Actionable Insight:
Short Netflix, Inc. (NASDAQ:NFLX) at current levels, with a strict stop loss above $400, for an intermediate target at $347
Long Netflix, Inc. (NASDAQ:NFLX) if it moves above $415 for an intermediate target at $436
