Netflix sees earnings turnaround | decision point

Netflix (NFLX) earnings were announced today, and the news was good. . . Except for one very small thing. They also suspiciously announced that they will no longer be reporting subscriber metrics starting next year. This would be like General Motors saying it will no longer report the number of cars and trucks it makes. I acknowledge that other aspects of the report may be the cause of the conflict, but let’s look at the technical part.

After the January gap, prices formed a three-month rising island, but technically all was not well. The falling PMO formed a negative divergence against the rising price. When PMO falls above the zero line, it indicates that the strength supporting the uptrend is waning.

Additionally, on-balance volume (OBV) also showed a slight decline. OBV usually tracks prices, but if it doesn’t, it will be brought to our attention. In this case, it suggests that NFLX is not attracting enough volume to justify the price increase.

conclusion: Gaps do not always lead to island inversion. For example, in October a gap formed, forming very similar islands. However, prices did not reverse in January and the gap widened on the island. In the recent case of the island, OBV raised a warning flag.

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Useful DecisionPoint links:

trend model

Price Momentum Oscillator (PMO)

balance volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear market rules