Netflix Stock Breaks Out to All-Time Highs
Analysts reacted very favorably to the first quarter financial results. Morgan Stanley maintained its Overweight rating and $370 per share price target, saying that the results are a rare combination of a subscriber beat and margin guidance boost. Meanwhile, GBH Insights called the subscriber count "eye popping" and maintained its Attractive rating and $375 per share price target on the stock given the favorable results. (See also: Netflix Skyrockets on Higher Subscriber Growth.)
From a technical standpoint, the stock broke out from prior highs made in early March to fresh all-time highs of $338.62 during Tuesday's session. The relative strength index (RSI) appears a bit lofty with a reading of 66.26, but the moving average convergence divergence (MACD) experienced a bullish crossover that could signal further upside. These indicators suggest that the stock could see a short-term pullback before resuming its uptrend.
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Traders should watch for a continued breakout from prior highs and a move toward R2 resistance at $359.82 on the upside. If the stock breaks back below its prior highs, the stock could move to retest the pivot point and 50-day moving average at around $295.48. Traders should maintain a bullish bias on the stock given its solid fundamental performance and technical momentum moving into the second quarter. (For more, see: Why These 4 Big Tech Stocks Are Bargains.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.