Stock Of The Day: Is Netflix About To Rebound?

Netflix, Inc. (NASDAQ:NFLX) shares are trading higher on Friday. But, they have been trending lower since early July.

Netflix is the Stock of the Day. It is at an important support level, and the downtrend may be over.

• Netflix stock is building positive momentum. What’s pushing NFLX stock higher?

Sometimes people forget that markets are driven by supply and demand.

In the stock market, if there is more supply, or shares for sale, than there is demand, or shares to be bought, the stock will trend lower.

Investors and traders who wish to sell will reduce their prices and undercut each other to draw buyers into the market. This will force the shares into a downtrend.

The tide turns when the downtrend gets to a support level. There are as many, or maybe even more, shares to be bought than there are for sale. Those who wish to sell can do so without pushing the price lower.

As you can see on the Netflix chart, there has been support around $83. Sell-offs ended there in January and April. And now the stock has found support at the level once again.

Sometimes, stocks rally after they drop to support levels. This is what happened in January and April.

Stocks rally off support when some of the buyers who created the support become anxious and impatient. These buyers are worried that other buyers will be willing to pay higher prices than they are.

They know the sellers will go to whoever is willing to pay the highest price.

As a result, these anxious buyers increase their bid prices. Other anxious buyers see this and do the same. This can force the price into an uptrend.

Now that Netflix has reached this support once more, there is a good chance that it reverses and moves higher again.

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