Key takeaways
- Netflix shares jumped in extended trading Tuesday after the streaming giant reported better-than-expected fourth-quarter results and raised its 2025 revenue outlook.
- Prior to the company’s earnings release, the stock saw buying interest around the popular 50-day moving average.
- Bar pattern analysis forecasts a potential upside target of around $1,285 and indicates that a new trend could manifest until the end of May.
- Investors should watch for major support levels on the Netflix chart, around $930 and $824.
Shares of Netflix (NFLX) soared Tuesday after the streaming giant reported better-than-expected fourth-quarter results and raised its 2025 revenue outlook.
Investors also welcomed the streamer’s decision to increase its subscription prices in the United States, Canada, Portugal and Argentina. The company added 19 million net new subscribers in the fourth quarter, bringing its membership to more than 300 million.
Through Tuesday’s close, Netflix shares had gained 80% over the past 12 months, far outpacing the S&P 500’s 25% return over the same period. The stock jumped 14% to nearly $995 in after-hours trading.
Below, we take a closer look at Netflix’s chart and use technical analysis to highlight key post-earnings price levels worth watching.
Stock funds at the 50-day moving average
After hitting a record high in early December, Netflix shares fell as much as 13% before the gains came just below the 50-day moving average.
Although the stock failed to close above the popular metric ahead of the quarterly earnings release, trading volumes recorded their highest level since mid-October, suggesting that some market participants largest had positioned themselves for post-earnings volatility.
Let’s turn to Netflix’s chart to forecast how a new uptrend in the stock might play out and also identify two major support levels worth watching on pullbacks.
Bar Pattern Analysis
Investors can speculate on how a new uptrend might take shape by applying bar pattern analysis, a technique that studies past trends to predict future price movements.
When applying the tool to Netflix’s chart, we take the price bars comprising the stock’s trend change from August to December of last year and overlay them from that month’s low.
This analysis projects a potential upside target of around $1,285 and indicates that a new trend could manifest through the end of May if price action matches last year’s rally. We selected the previous trend because it immediately followed a correction of more than 10%, setting the stage for a repeat of a similar move after the stock’s recent decline.
Key Support Levels to Watch
During retracements, investors should initially closely monitor the $930 level. This area would likely attract strong buying interest near a narrow consolidation range that has formed on the chart just below the stock’s all-time high (ATH), possibly moving from a region of resistance to a support.
Finally, a close below this level opens the door for a more significant decline to around $824. Investors could look to accumulate stocks in this region near a trend line that connects the slight pullback in mid-November to this month’s low.
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