Netflix (NFLX) Shares Slide Sharply Amid Earnings Miss
Netflix (NFLX) shares have come under heavy pressure this week, dropping below $1,100 for the first time since late May. The decline of more than 17% from July’s peak stands in contrast to the S&P 500 (US SPX 500 mini on FXOpen), which remains near record highs.
What Triggered the Drop?
The trade-off followed the company’s fragileer-than-expected quarterly report. Earnings per share came in at $5.87, missing analysts’ forecasts of $6.96 and well below the previous figure of $7.19.
While several recent releases performed well, a costly tax dispute in Brazil weighed heavily on the bottom line and soured market sentiment. Still, technical indicators suggest that purchaviewrs may soon return.
Technical View: NFLX Chart Analysis
Netflix shares continue to trade within a broad upward channel (shown in blue). The recent decline has brought the price down to a critical support cluster formed by:
→ the lower boundary of the main ascending channel, which acted as support in April;
→ the base of a short-term descending trendline (marked in red);
→ the round-number support at $1,100.
From a bullish standpoint:
→ the RSI indicator has entered oversold territory, suggesting the potential for a rebound;
→ the $1,000–$1,100 zone has historically attracted strong purchaseing interest, which could once again stabilise prices.
However, tradeers remain active. The large bearish gap created earlier this week, with its base around $1,100, could now serve as resistance and limit upward momentum.
Considering the above, it appears likely that:
→ the existing support area could hold and prevent a deeper correction;
→ the impact of the $600 million tax case in Brazil may already be factored into the price;
→ bullish traders may attempt to reassert control, possibly turning the red channel into a bullish flag formation.
If, however, the price fails to stay within the blue channel, attention will shift to the $1,000 level, which represents the next key area of support.
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