Netflix stock price has fallen by more than 38 per cent in the past few days. In today’s trading session, the stocks are down by over a percentage point and looks likely to continue with the bearish move throughout the session.
InvestingCube's S&R Levels
In Sell Zone
The recent fall by Netflix represented its biggest single-day percentage drop since Oct. 15, 2005, when the prices dropped by more than 41 per cent. Netflix has also struggled in 2022 and is down 62 per cent year-to-date when you include the recent fall. The recent fall is also not the first time Netflix shares have tumbled in 2022. In January, the shares fell by more than 20 per cent after the company announced they were expecting to add a much smaller number of subscribers than it did the previous year.
However, the recent 35 per cent fall on Wednesday, and the continued fall was unexpected. Nobody was expecting Netflix to announce they were losing subscribers. Investors expected a sluggish subscription rate, but seeing lose subscribers by hundreds of thousands was a big deal. This resulted in panic selling, with over 100 million Netflix shares trading hands on Wednesday, a milestone that had not been crossed since 2015. During the ensuing chaos, some investors looked to be buying the dip.
One reason why Netflix stock price dropped was increased competition from other streaming sites such as Hulu and HBO. These services can offer ad-supported cheaper options. On the other hand, Netflix does not entertain offering cheaper options, which has likely led to the recent drop in the number of subscribers. However, recent reports indicate the company is mulling on whether to implement such an option.
Netflix Stock Price Prediction
The Netflix stock price will mostly be impacted by Fundamentals and less by technicals in the next few days. However, in the chart below, we can see that the prices have been trading bearish for a long time. Since January, the stock price has dropped by more than 62 per cent and is likely to continue with the current drop. Therefore, my Netflix stock price forecast expects the prices to continue dropping. As a result, there is a high likelihood of the prices trading below $200 in the next few days.