A double bottom pattern has formed right on a major support level for Netflix shares, as price tests the 200 SMA (simple moving average). MACD is moving up from the oversold area, indicating that sellers are exhausted and that it’s time for buyers to jump in.
The pair seems to have made progress in breaking above the pattern’s neckline around $350.00. The double bottom formation is roughly $40 in height, which means that the resulting breakout could be of the same size.
Netflix Shares Outlook
The range could hold for Netflix shares in the near term, as there is no major market catalyst to push for a downside break of $300. In fact, reports for Netflix have been somewhat upbeat.
The company claims that it is responsible for most of the traffic gains over the internet, as users stream movies over its subscription service. In peak evening hours in North America, Netflix downloads account for more than 30% of overall traffic. For the first quarter of the year, Netflix reported close to 50 million customers, enough to give Netflix shares a good boost.
“In North America, the dominance of real-time entertainment is due in large part to the continued market leadership of Netflix, which saw growth thanks to the continued rollout of high bitrate Super HD content,” showed a report from Ontario-based Sandvine Group. Netflix is also starting to gain market share in the United Kingdom and Ireland.
Netflix Chief Executive Reed Hastings has clarified that the online movie streaming company has reached a deal with Comcast in order to gain faster internet speeds and to serve its customers better. This could be another factor in driving Netflix shares higher, perhaps until the next resistance level at $400.
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