Netflix, Inc. (NFLX) shares fell more than 3% during Thursday's session after the streaming giant announced that it would start shutting down inactive accounts. Management said that these inactive accounts represent less than one-half of 1% of its overall membership base – amounting to a few hundred thousand – and the move was already factored into its financial guidance.
At the same time, Wedbush analyst Dan Ives warned that antitrust momentum is building among regulators. Ives remains bullish on the FAANG companies, saying that large breakups could prove challenging for regulators, but warned that acquisitions could be a slippery slope as regulators may be more apt to scrutinize M&A deals.
Netflix and many other stay-at-home plays have also underperformed during the market's rally earlier this week. Federal Reserve Chair Powell said that the central bank was ready to step in to support the economy, while vaccine hopes sparked optimism that the world would eventually be able to move past the COVID-19 outbreak.
From a technical standpoint, Netflix stock extended its move lower toward the pivot point and 50-day moving average. The relative strength index (RSI) fell to neutral levels of 52.86, but the moving average convergence divergence (MACD) continues to trade sideways. These indicators suggest that the stock could continue its move lower over the coming sessions.
Traders should watch for a move lower toward the pivot point and 50-day moving average near $400.00 over the coming sessions. If the stock rebounds higher, traders should look for a breakout from prior highs and R1 resistance at $460.41 over the coming session. Despite the short-term move lower, the stock remains on the upswing since hitting lows in mid-March.
The author holds no position in the stock(s) mentioned except through passively managed index funds.