Netflix (NASDAQ: NFLX) stock price has performed extremely well in 2023. In fact, it has become one of the best-performing tech stocks of this year. However, after a massive rally in the first half of the year, the stock is having a massive pullback after its Q2 earnings.
On Thursday, US tech stocks experienced a major sell-off after months of uptrend. The Nasdaq Composite fell by 2.1%, which was its biggest loss since March 2023. The major reason behind this weakness was negative price action by Tesla and Netflix stocks.
The US tech stocks have been on fire since their Q1 earnings. The stocks like Netflix, Tesla, NVIDIA, Apple, and Meta have led this rally. However, the Q2 results by Netflix and Tesla were not that positive, and hence the investors rushed to take profits after the earnings call.
Netflix Inc. not only missed the sales estimates but also posted lower-than-expected guidance for Q3 2023. This triggered a massive sell-off, and Netflix stock price plunged by 8.41%. Tesla’s earnings report was also scheduled on the same day, which further intensified the selling.
Netflix Stock Price May Drop Below $400
A look at the following NASDAQ: NFLX chart reveals that there was a strong resistance around the $400 level, which was broken by the stock. This level needs to be flipped into a support zone if the bulls intend to aim for more upside. The RSI and MFI indicators are overbought and showing bearish divergences.
As long as it holds the $400 level, Netflix stock price forecast will remain bullish. However, a breakdown below this level could be brutal and trigger a massive sell-off. Therefore, this level might act as a line in the sand for many traders.
In the meantime, I’ll keep sharing the updated Netflix forecast and my personal trades on my Twitter, where you are welcome to follow me.