Netflix has reversed sharply lower alongside other US stocks this week, just days after making a new 2020 high, around the $393.00 level.
Netflix stock price analysis shows that a steeper correction towards the $320.00 level may occur over the coming days and weeks.
Netflix medium-term price trend
Despite a bullish technical breakout last week, Neftlix’s share price is now significantly lower than it’s current 2020 high, as fears over coronavirus hurt the leading tech stocks inside the NASDAQ.
Netflix stock technical analysis shows that this may just be the start of the pullback, with bears potentially targeting the $320.00 level.
The daily time frame shows that a loss of the $340.00 level could see the stock probing back towards its 200-day moving average, around the $320.00 level.
Furthermore, the 50 percent Fibonacci retracement of the current 2020 high to September 2019 low is located around the $320.00 level.
The daily time frame also shows that the stock has fallen back inside a large wedge pattern. The range of the wedge pattern is between the $270.00 and $360.00 levels.
Netflix short-term price trend
Netflix stock technical analysis shows that the stock is still bearish over the short-term while price trades below the $358.00 level.
The one-hour time frame shows that a bearish head and shoulders pattern has formed during the recent pullback from the $393.00 level.
Looking at the size of the pattern, it is currently indicating that Netflix’s share price could drop towards the $330.00 area.
The neckline of the pattern is found around the $362.00 level, which implies that a bearish breakdown has already begun.
It is also noteworthy that the stock has fallen below all key short-term moving averages and is starting to turn heavily bearish.
Netflix technical summary
Netflix stock technical analysis shows a decline towards the $330.00 to $320.00 area may be on the horizon. Sustained weakness below the $362.00 level should be considered a bearish signal.
