Chart Art: Levels to Watch on NFLX After Earnings

Is Netflix about to continue its bullish climb, or are the bears preparing for a pullback?

With NFLX earnings approaching, we are now approaching key technical levels that could pave the way for the next step.

Here’s a closer look at the current setup.

Netflix (NFLX): 4 hours

Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t yet done your homework on NFLX profits, be sure to do so before creating a trading and risk management plan!

From a purely technical standpoint, NFLX has been on the rise since August, bottoming at around $588, and is now trading just above the $700 level.

So the bullish momentum is still very real, and if the upcoming earnings report continues to provide a bullish base case for the stock, the potential support area around the $700 handle is the area to watch if NFLX pulls back from the action.

This is where we see the technical arguments coming together, firstly the potential for a resistance break there to attract buyers, as well as the rise of the 100 and 200 SMAs increasing the odds of attracting algorithmic traders and the TA crowd to the upside.

Now, if this area around $700 is tested and the bearish fundamental catalysts break to the downside, this could attract the bears and push the market to the next potential support zone, around the $665 mark, roughly a daily ATR from current prices.

Now, if there is no decline in earnings and the earnings report is mainly positive, beware of the market breaking higher. If so, the next potential resistance area could be $750 in the short term, which is a reasonable target as it also falls within a daily ATR of current market trading.

Whatever bias you end up planning, don’t forget to practice proper risk management and stay up to date with NFLX news!