Netflix Stock Chart Produces First ‘Death Cross’ Pattern in Nearly 2 Years

Shares of Netflix Inc. NFLX,
fell 2.0% in midday trading on Thursday as a “death cross” pattern appeared in the streaming service company’s stock chart, the first appearance of the bearish pattern in nearly two year. The stock’s 50-day moving average, which many consider a guide to the short-term trend, slipped to $513.96 from $514.89 on Wednesday, to drop below the 200-day moving average, seen as a dividing line between the longer-term uptrends and downtrends, which fell from $514.47 to $514.50. Some chart watchers believe that a “death cross” marks the spot where a short-term pullback turns into a longer-term downtrend. The stock was trading 16.5% below its record close on Jan. 20 at $586.34. At the same time, the S&P 500 SPX,
gained 9.0%. Netflix’s latest “death cross” emerged on August 28, 2019, after the stock fell 24.2% from a nearly one-year high about four months earlier; the stock lost another 12.7% before hitting bottom about a month later. The “death cross” before that appeared on Nov. 19, 2018, after falling 35.4% from a then-record close reached about four months earlier; the stock fell another 13.6% before hitting bottom about a month later.

Karen J. Nelson