Netflix (NFLX) Stock: Only overbought conditions could chill ATH-aiming, videogaming-based rally
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADE- Netflix has unveiled a new video-gaming strategy to expand its offering.
- The gaming trend is set to outlast the pandemic.
- NASDAQ: NFLX has advanced on Wednesday and is set to march toward record highs on Thursday.
Chilling out may be fun during the summer – but as economies reopen, Netflix and chill may lose out to outdoor activities. However, while streaming services may have peaked with the pandemic, growth in the video-gaming sector is set to continue. That is where Netflix Inc (NASDAQ: NFLX) is heading, and investors are cheering.
Netflix (NFLX) stock forecast
Netflix CEO Ted Sarandos and his team have hired Mike Verdu, an expert in gaming, to lead the new effort. Verdu previously oversaw Facebook's development of content for Oculus virtual headsets. Before that, the executive worked at Electronic Arts (EA) and was responsible for bringing Star Wars to gamers. He was also involved in well-known games such as Sims. Apart from signing Verdu, Netflix has also posted job offerings for game developers.
According to Bloomberg, videogames are scheduled to appear alongside other videos – movies, series, documentaries, etc. – in Netflix's offering sometime in 2022 and will be initially free of charge. That could help retain young customers who would ditch the TV set for the computer to play games. It would also widen Netflix's offering for young families.
As the pandemic recedes, media companies such as Netflix, fear an "attention recession" that would result in a substantial drop in profits. The big winners of the covid crisis could be the biggest losers when things return to normal. However, gaming is "stickier" according to Craig Chapple of Sensor Tower, quoted by The Economist. An extra hour per week was spent on gaming and there are no signs of withdrawal.
Source: The Economist
While the move looks bold, promising – and perhaps necessary to stay on top – Netflix risks following the footsteps of Disney, which has failed in its video gaming initiatives despite having success elsewhere.
Netflix (NFLX) stock chart
The daily NASDAQ: NFLX graph is showing that shares have been benefiting from an uptrend – higher highs and higher lows – since early May. The stock price broke above the 50-day and 200-day Simple Moving Average, yet another bullish sign.
However, the Relative Strength Index (RSI) is hitting 70 – entering overbought conditions which could trigger a correction.
Nevertheless, the bullish momentum could continue and the critical levels to watch on the upside are the recent high of $554, the early February peak of $566, and the all-time high of $593.
Support awaits at $524, which is the bottom of the gap line from June, then the double-bottom of $478 recorded in June, and finally $461,a cushion from last year.
Like this article? Help us with some feedback by answering this survey:
- Netflix has unveiled a new video-gaming strategy to expand its offering.
- The gaming trend is set to outlast the pandemic.
- NASDAQ: NFLX has advanced on Wednesday and is set to march toward record highs on Thursday.
Chilling out may be fun during the summer – but as economies reopen, Netflix and chill may lose out to outdoor activities. However, while streaming services may have peaked with the pandemic, growth in the video-gaming sector is set to continue. That is where Netflix Inc (NASDAQ: NFLX) is heading, and investors are cheering.
Netflix (NFLX) stock forecast
Netflix CEO Ted Sarandos and his team have hired Mike Verdu, an expert in gaming, to lead the new effort. Verdu previously oversaw Facebook's development of content for Oculus virtual headsets. Before that, the executive worked at Electronic Arts (EA) and was responsible for bringing Star Wars to gamers. He was also involved in well-known games such as Sims. Apart from signing Verdu, Netflix has also posted job offerings for game developers.
According to Bloomberg, videogames are scheduled to appear alongside other videos – movies, series, documentaries, etc. – in Netflix's offering sometime in 2022 and will be initially free of charge. That could help retain young customers who would ditch the TV set for the computer to play games. It would also widen Netflix's offering for young families.
As the pandemic recedes, media companies such as Netflix, fear an "attention recession" that would result in a substantial drop in profits. The big winners of the covid crisis could be the biggest losers when things return to normal. However, gaming is "stickier" according to Craig Chapple of Sensor Tower, quoted by The Economist. An extra hour per week was spent on gaming and there are no signs of withdrawal.
Source: The Economist
While the move looks bold, promising – and perhaps necessary to stay on top – Netflix risks following the footsteps of Disney, which has failed in its video gaming initiatives despite having success elsewhere.
Netflix (NFLX) stock chart
The daily NASDAQ: NFLX graph is showing that shares have been benefiting from an uptrend – higher highs and higher lows – since early May. The stock price broke above the 50-day and 200-day Simple Moving Average, yet another bullish sign.
However, the Relative Strength Index (RSI) is hitting 70 – entering overbought conditions which could trigger a correction.
Nevertheless, the bullish momentum could continue and the critical levels to watch on the upside are the recent high of $554, the early February peak of $566, and the all-time high of $593.
Support awaits at $524, which is the bottom of the gap line from June, then the double-bottom of $478 recorded in June, and finally $461,a cushion from last year.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.