Netflix Inc. (NFLX) Shares Slip, Investors Watching Closely, Here is Why

Netflix Inc. (NASDAQ: NFLX) shares rose on Tuesday Dec 13 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, the Dow DJIA, +0.47% climbed 106 points, or 0.6%, to 19,905. If the Dow finishes higher, it will notch its seventh straight gain.

The S&P 500 index SPX, +0.56% gained 10.45 points, or 0.5%, to 2,267 and the tech-heavy Nasdaq Composite Index COMP, +1.02% added 48 points, or 0.9%, to 5,461.

Both the S&P 500 index SPX, +0.56% and Nasdaq Composite COMP, +1.02% ended lower on Monday, with investors appearing reluctant to push shares higher ahead of the Fed meeting

Shares of Netflix Inc. (NASDAQ: NFLX) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Hold on the stock, Netflix Inc. has a 52-week high of $129.29. The one-year price target of $124.10 is above the opening price of $123.51, that has caused a number of other analysts to comment on the company in recent days. Downgrades are more common when analysts believe that the future prospects for the security have weakened from the initial recommendation, often due to an important and integral change in the company’s procedures, future vision or industry.

Netflix Inc. (NASDAQ: NFLX) shares last traded at $124.03, an increase of $1.20 or 0.98% compared to the previous closing price. Opening at $123.51, they ranged from $122.78 and $124.30 throughout the day.

Netflix Inc. (NASDAQ: NFLX) currently has a market cap of 53.23B.

Netflix Inc. (NASDAQ: NFLX) Average Daily Trading Volume

The stock’s average daily volume is 9,524,760 shares out of a total float 422,201,000 and some 952,042 shares traded hands yesterday, below normal. Look for trading volume to pick up in the coming days as swing traders often use swings in trading volume to pinpoint substantial volume aggregation or distribution by institutional investors.

However, a single day of heavy buy side trading is not enough to assert a trend. As such, market traders will continue to watch for institutional sponsorship as an indicator that financial institutions are moving forward.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These instituitional investors have teams of analysts researching thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

Netflix Inc. (NASDAQ: NFLX) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By spotting trends, moving averages allow investors to make those trends work in their favor and increase the number of winning trades.

With that in mind, Netflix Inc. (NASDAQ: NFLX) now has a 50-day MA of $120.60 and 200-day MA of $103.10. It has traded in a 52-week range between $79.95 – 129.29 and today’s last price is 4.07%% lower than the 52 week high of $129.29.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors seek companies that have been successful at growing their earnings by at least 25% over 3 consecutive years.

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