Netflix (NFLX) Streams Higher on Earnings, But Cycles Suggest Pullback

Netflix stock price soared on Tuesday morning, trading 6% higher after the media company raised the price of its services.

However, market cycles for Netflix stock (NASDAQ: NFLX) are in a negative structure, with continued downside risk into 2019.

Netflix Earnings Report

Netflix announced an increase in the price of its services by 13-18%, its largest increase ever. The timing is interesting, as streaming media competition continues to heat up. The increase will be implemented for existing subscribers over a 3 month period.

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According to CEO Reed Hastings, “Price is all relative to value. We’re continuing to increase the content offering and that is reflected in viewing around the world.” However, previous price increases have had mixed results, in one case brining a large drop to the stock.

Stock Cycles Forecast: In looking at the market cycles for Netflix (NFLX), we can see it is still in the rising phase of its current cycle. However our view is negative, as it made a lower high in the previous cycle.

We believe the stock will fail in resistance $350-370. Our intermediate downside target for NFLX is below $300.

Netflix (NFLX) Stock Weekly Chart

netflix earnings stock higher rally analysis investing forecast_chart january 15

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.

Twitter:  @askslim

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.