Did you hear about the new hit Netflix show? It is called The Swan Song where NFLX jumps off a cliff into the unforgiving ocean below. Netflix should be called Netflex for flexing its muscles. Netflix is the bull's favorite flavor these days. Forget those old and tired NVDA and PLTR long plays, they will fade away like the penny loafer, it is time to pump a new favorite son called Netflix.
The television talking heads, analysts, strategists, Uber driver and shoeshine boy are in total 100% agreement that NFLX stock will go up forever. Rabid pundits purposely animate themselves to increase viewership by wildly waving arms telling folks to buy, buy, buy!! All of those pundits do not tell you that they are selling, selling, selling, hoping for you to be the sucka holding the bag, and so far it is working.
The daily and weekly charts above clearly show that NFLX is topping-out. It is time to sing Goodnight, Adios, Au revoir and Auf wiedersehen to NFLX. Lawrence Welk. We hardly knew ye, Neflix. How can that be when NFLX just printed a new all-time record high? The wine is flowing like water. Everyone (corrupt Wall Street) says NFLX is a guaranteed winner.
On the daily chart, the rising wedge pattern is bearish. The Friday print is a doji candlestick that typically signals a change in direction. Price has violated the upper standard deviation band so a move to the middle band at 1120 and lower band at 1026, and sharply rising, are on the table. Price is overextended and a mean reversion lower would be expected.
The red lines show universal negative divergence across all chart indicators as price makes the new all-time high. There is no gas, not even fumes, left in the tank to take it higher in the daily time frame. Momentum is on NFLX's side that may create buoyancy for a few days but it would be for naught. The RSI and stochastics are overbot agreeable to a pullback in the daily time frame.
The ADX on the daily squeezes up into a strong trend higher for price (pink box) but as price catapults higher, the ADX is flat or rolling over again likely to drop out of the strong trend higher box. Note that the strong trend higher (peaks) have decreased since Thanksgiving. The Aroon makes you laugh out loud. The red circles show that 100% of the bulls expect NFLX to go up forever, and 100% of the bears expect NFLX to go up forever. Pause for laughter. There are zero bears. The boat is fully loaded on one side with everyone drunk as skunks drinking Netflix wine. You know how that ends.
On the NFLX weekly chart, pretty much the same dealio. The rising wedge is bearish. Price has violated the upper band so the middle band at 981 and lower band at 780 are on the table. Price is extended above its moving average ribbon needing a mean reversion lower. Just like the daily chart, the red lines show all indicators in neggie d and the RSI and stochastics are overbot agreeable to a pullback.
If you are bullish NFLX, that means most of you idiots reading this, your hope relies on the MACD line on the weekly chart. It is threatening to breakout a touch higher and if it does, it will extend the top by a week or two so keep an eye on it. That would give you a few more days to exit the long side. If she comes in with a bad attitude tomorrow morning, however, the MACD will likely drop lower and the stock is toast probably beginning its multi-week pullback right away.
The ADX on the weekly shows that price is in a strong trend higher for the last 17 months since the start of 2024. Note, however, the ADX peaked with the stock market on 2/19/25 and is far lower as price catapults skyward (neggie d). Also, the ADX is near dropping out of the pink box that will verify the end of the strong trend higher in price on the weekly basis.
The Aroon on the weekly is a repeat of the daily scenario. Every single bull and bear on NFLX believes the stock will go up forever. It is funny. This is why the smart money has their talking heads on television to pump and dump Netflix. If you are Joe Retail, Jane Winedrinker, Carlos Bagholder or Savita Sixpack, and you bot NFLX stock over the last month, you will be losing money in short order going forward. You are the bagholding sucka's. The stupid human tricks continue as Todd sings Alright Guy.
Keystone does not hold NFLX long or short but obviously the path forward is to short it. Every single metric discussed above for both charts is bearish. Be careful with the momentum since price may try to linger flat for a few days or week or so before the multi-week down move begins. If you remain long NFLX, you are going to be fed Into the Buzzsaw; that was a good book. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added Monday Morning, 5/19/25, at 6:45 AM EST: JPM downgrades NFLX. They must have read Keystone's technical analysis. NFLX loses a couple percent in the pre-market sitting at 1166. The all-time record high is 1196.50 and all-time closing high at 1191.53. NFLX started the year at 891.
Note Added Tuesday Morning, 5/20/25, at 5:19 AM EST: JPM CEO Jamie Dimon, that the Wall Street crowd worships, repeats the word 'complacency' over and over yesterday. He gets it. Individual stocks, and the stock market, are setting up with another top like 2/19/25.
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