Operating margin is shrinking as the company increases spending on added content. Netflix is attempting to offset this by adding gaming applications.
Netflix has an elevated p/e ratio of 48.74% and does not offer a dividend, according to Macrotrends.
The Daily Chart for Netflix
The daily chart for Netflix shows a decline to $478.54 on May 19, 2021, followed by a rally to its all-time intraday high of $700.99 set on November 17. Then came the 24.9% decline to $526.32 set on January 10.
The rally was fueled by a golden cross set on August18, 2021 when the 50-day simple moving average rose above the 200-day simple moving average. The downside correction failed to hold the 50-day simple moving average on December 1. There was a price gap below the 200-day SMA on January 6. The week’s value level at $527.08 held on Monday, January 10.
If this weekly level holds the upside is to the annual pivot at $573.13. These two levels are the bottom two horizontal lines.
The Weekly Chart for Netflix
The weekly chart for Netflix is negative with the stock below its five-week modified moving average at $590.74. The 200-week simple moving average or reversion to the mean is at $422.20. The 12x3x3 weekly slow stochastic reading is declining at 21.46 and will be oversold when the reading falls below 20.00.
Trading Strategy: Buy weakness to the weekly value level at $527.08 and reduce holdings on strength to its annual pivot at $573.13.