The NFLX crash was fast and swift. Shares dropped from over $300 to $60 in just about four months. To put this decline into prospective, the rally from $60 to $300 took over 18 months. Now with history aside, it is time to look into the future.
A reasonable target could be the 23.6% Fibonacci retracement level. This retracement level looks to take back 23.6% of the net decline, peak to trough. On the chart, this is the $112ish level. NFLX tested and broke through this level once before, however this was a few months after the massive decline. This rally could have been a function of a short squeeze, because it was right after an emotional crash.
Janney Montgomery analyst, Tony Wible, recently told investors that the stock may rise to $129. This is indeed an interesting target. His target is near the $133 level, which was the February 2012 post-crash bounce back high. On the bullish side, NFLX recently inked a deal with DIS, but one must be cautious however. Looming and realized threats from CSTR, Hulu, and AMZN still are out there and hungry for blood.
Author
salerno.mark.a@gmail.com