It is logical for the video streaming business to take advantage of the coronavirus epidemic because of most people need to stay home. One of the leaders in video streaming and production of online series and movies – Netflix looks like a good investment amid the outbreak of COVID-19. Demand for Netflix streaming services may increase as much of Europe and the US are required to stay home due to restrictions on social and physical distance.
It is important to note that the epidemic has stopped live sports events, which would lead to a reduced demand for traditional entertainment channels and an increase in specific ones such as Netflix.
And although Netflix has revealed that they are stopping all their production of new programs and content, the company said they have enough unpublished products to release in the next few months.
On the weekly chart, the stock forms an ascending triangle. After peaking at $ 424 on January 18, 2018, the price of the stock is contracting and correcting in ABCDE movement with higher lows and higher highs signaling a bullish correction. The first bottom found support at 61.80% Fibonacci from the previous breakout, and the second bottom formed at 50% Fibonacci, which leads us to believe that the next higher low will be around the next Fibonacci level – 38.2% – around $ 313.
On the daily chart, the price is consolidating in a wide range. The daily 50MA crosses bullishly 200MA with the 200MA moving in a straight line, which gives another reason to believe that upward movement will follow. Judging by the RSI oscillator and the tilt that pushes it, the price is expected to break out in the next few weeks.
Clear level of horizontal orderblock support – $ 303-308. Diagonal ascending trend line of support in the same area. 38.20-50% Fibonacci from the beginning of the correction to the top at $ 393 is a good area for bids – $ 312-331.
4H shows possible ABC correction of the first impulse (290-373$) up to 61.8% Fibonacci – 322$.
Stock is suitable for a long positions with entry around 314-330$. Price target would be 555$, Stop Loss: $291. Trade R/R: 1:6
Junior Trader Radi Djuma