Anthony Speciale Stock Market Analyst

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Netflix Stock Plunges to Test Long-Term Support

Netflix, Inc. (NFLX) was one of the biggest beneficiaries of the stay-at-home trend during 2020 and through most of 2021.

Netflix, Inc. (NFLX) was one of the biggest beneficiaries of the stay-at-home trend during 2020 and through most of 2021.

No questions asked, Netflix, Zoom Video Communications, Inc. (ZM) and Peloton Interactive, Inc. (PTON) were some of the greatest pandemic rally runners in the entire market!

Just take a look at the monthly chart below to see what I mean…

Monthly Chart of Netflix, Inc. (NFLX) — Source: TradingView

But now that the lockdowns have passed, those stocks that performed the best are now some of the market’s biggest laggards.

The question at hand here is this…

If you’re a Netflix lover and you want to be an investor in this company, is now your opportunity to buy it at a steep discount?

The Technical Picture

On a technical level, this support structure homes in on a lot of long-term data.

To be clear, this is not a strategy to attempt to “catch a falling knife” and hope to get lucky.

You’ll need to want to be in this for the long run, and you may want to consider averaging in if it goes lower from here.

Just because it’s testing meaningful support doesn’t mean it can’t break through it.

When Leaders Become Losers

This reminds me of the recent sell off in Meta Platforms, Inc. (FB). The stock got its butt handed to it.

But the investors I know who love the company and have it as part of their portfolios saw it as the opportunity to add to their positions at a steep discount.

Is NFLX going out of business? I don’t think so.

The company has a huge following. However, they have logistical issues.

Dealing with Issues

First among them is “access sharing,” which happens when one paying customer shares their subscription with several other people.

They believe there are over 100 million viewers who are sharing subscription access.

Second, there are a lot of other streaming platforms now. While Netflix is the cornerstone of its sector, it’s no longer the only game in town.

So, they have some headwinds to contend with. But as far as the chart goes, $225 is an attractive support area in my humble opinion.

Trade Like an Insider

Now, if you’re a swing trader like me, you might want to consider checking out the work of my colleague and expert trader Ross Givens.

Ross’s premium Insider Effect research service focuses on corporate insider buying.

These insiders are corporate CEOs, CFOs, executives and board members either purchasing or selling shares in their own companies.

These folks have a footing of knowledge that Main Street investors simply do not.

Ross is holding a special LIVE session tomorrow at 12:00 p.m. EST, which is absolutely free to attend.

He’ll cover his strategy for swing trading alongside corporate insiders and generating potentially massive gains as a result.

Just click here to register and reserve your seat for his special LIVE Insider Effect presentation tomorrow at 12:00 p.m. EST.

Rules to Live By

“Follow your heart, listen to your inner voice, stop caring about what others think.” Roy T. Bennett

Until next time, I wish you a beautiful and blessed day!

Yours In Trading Success,

Anthony Speciale Jr.

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