Netflix is flying a bullish flag, and traders should pay attention.
The video-rental company's stock has been drifting downward over the last week, but today is breaking free is it climbs above $96.
The chart below shows the bounds of the bearish price channel that's now giving way. The green vertical line to the low $120s is the potential upside price target that could be reached if the pattern remains active and completes. That would completely fill the bearish gap from October, the large blank area on the left side of the chart.
There is an old saying among traders that all gaps, bullish or bearish, are eventually filled, so that also favors the upside for now. While there are no guarantees that the stock won't encounter an obstacle before reach its objective, for now the benefit of the doubt goes to the bulls. The first big test of resistance would be roughly at the $105 area, near October lows.
(Chart data provided by Thomson Reuters)
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