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

Netflix Inc. (NASDAQ: NFLX) shares rose on Thursday Nov 19 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, stocks opened flat this morning, struggling for direction in early trade ahead of congressional testimony by Federal Reserve Chairwoman Janet Yellen. Ahead of an appearance before the Joint Economic Committee, Yellen said an interest-rate hike could come “relatively soon,”

The S&P 500 SPX, +0.25% fell less than 0.1% to 2,176.85 while Dow Industrials DJIA, -0.05% fell 9 points to 18,858. The Nasdaq Composite COMP, +0.18% declined 0.1% to 5,291.48.

Analysts at Vetr Inc. downgraded shares of Netflix Inc. (NASDAQ: NFLX) from Strong-Buy to Buy in a research note to investors today. Vetr Inc. currently has a rating of Buy on the stock. As a means of comparison, a number of other analysts have issued reports on the stock in recent days, and Netflix Inc. has earned a consensus one-year price target of $123.13, above the opening price of $115.13. Netflix Inc. stock has a 52-week high of $133.27. Material and integral changes in the company’s procedures, future direction or industry can cause downgrades as the analysts believe that the future prospects for the security have diminished from the initial recommendation.

Shares of Netflix Inc. (NASDAQ: NFLX) opened at $115.13 on Monday and traded in a range between, $115.07 and $116.81, and last traded at $115.73, which is an increase of $0.54 or 0.47% over the previous closing price.

Netflix Inc. (NASDAQ: NFLX) currently has a market cap of 49,664.95B.

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

The stock’s average daily volume is 9,447,660 shares out of a total float 421,922,000 and some 1,460,225 shares traded hands yesterday, below normal. Trading volume is likely to increase in the next few days as investors often use swings in trading volume to determine large volume growth or dissemination by institutional investors.

However, just a day of significant buy side trading is not enough to assert a trend. So market traders will continue to watch for institutional sponsorship as a signal that financial institutions are moving forward.

Institutional sponsorship just refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Institutional investors such as these have teams of analysts researching thousands of stocks. So 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.

Traders can make more useful choices on trades when they follow the trading habits of professional investors.

With that in mind, Netflix Inc. (NASDAQ: NFLX) now has a 50-day MA of $113.95 and 200-day MA of $99.64. It has traded in a 52-week range between $79.95 – 133.27 and today’s last price is 13.16%% lower than the 52 week high of $133.27.

Indeed, earnings growth is among the most important things to look at in regards to stock investing and, accordingly, investors seek companies that have grown their earnings at least 25% or more for the past 3 years.

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