Netflix's position as the one true god of streaming services is being challenged as competitors crowd the space.
Other players, such as Walt Disney Company (NYSE:) and Amazon (NASDAQ:), have encroached on the once undisputed market that Netflix (NASDAQ:) enjoyed, causing its market share to drop from 29% to 20%. Another difficulty facing the streaming giant is that all its growth eggs are in one basket. its streaming service. While its competitors, Apple (NASDAQ:), Alphabet (NASDAQ:), Facebook (NASDAQ:) and Amazon (NASDAQ:) and even Microsoft (NASDAQ:) — which is also pushing its leg through the streaming door — all dominate other tech space that gives them flexibility and additional expansion options. As if that weren't enough, Netflix also has long-standing shareholder problems. Shareholders fight for better corporate governance at the company and have been dissatisfied for years with the board's poor track record in implementing non-binding shareholder resolutions. But due to the voting requirements of the company, it is difficult to make a change. If shareholders lose their temper and start selling large parts of the shares, it could hurt the price.
Finally, let's not forget that Netflix had its heyday during the lockdown, when people were stuck at home. But after a year and a half of binge watching, people are excited to come back to life in the real world.
Netflix may have the weakest chart among FAANG stocks for these three reasons.
]
Stock has fallen out of the rising channel since July 2020. The price tried to climb back into the channel, but was hit hard. After making meaningful progress, it dropped even below its opening price, forming a shooting star – especially bearish considering it was rejected from the rising channel, as well as the 200 DMA, just before a Death Cross.
Now, price is moving towards the bottom of a new bearish channel since the January 20th high, meaning there is always the potential of a corrective rally to retest the descending channel top. ]
Conservative traders should wait for the stock to either return to the top of the channel and show resistance or break the bottom of the channel and try to climb back, which is rejected, before risking a short position.
Moderate traders would also wait for a return to the top of the channel or break a return to the bottom, to reduce exposure, not necessarily for additional confirmation. that suits them r needs. Here is an example:
Trade example
Entry: $500
Stop Loss: $520
Risk: $20
TGT: $420
Reward: $80
Risk: Reward Ratio: 1:4
Author's Note: This is just a trade example. The analysis is in the body of the post. If you have not read and understood it, DO NOT act. If you are afraid of losing your money, DO NOT trade. We don't know what the future holds. This is only an analysis based on historical statistics, according to our interpretation. We could be wrong. Even if our analysis is correct according to the principles of technical analysis, it only tries to determine probability, and the same outcome does not happen on an individual basis, only on a statistical basis. Therefore, it is imperative to manage your losses and enter into trades whose potential rewards justify the risk. As the name implies, this is just an example. Feel free to adapt it to your timing, budget and temperament. Follow our examples until you learn how to do that, but to learn, not to make a profit or you'll get neither. Guaranteed, nor your money back.
