Yahoo Finance

Key Takeaways

• Netflix shares jumped in extended trading Tuesday after the streaming giant reported better-than-expected fourth-quarter results and lifted its 2025 revenue outlook.

• Prior to the company's earnings report, the stock found buying interest around the popular 50-day moving average.

• Bars pattern analysis forecasts a potential upside target of around $1,285 and indicates that a new trend may play out until late May.

• Investors should watch major support levels on Netflix's chart around $930 and $824.

Netflix (NFLX) shares soared in extended trading Tuesday after the streaming giant posted better-than-expected fourth-quarter results and lifted its 2025 revenue outlook.

Investors also cheered the streamer's decision to raise its subscription prices in the U.S., Canada, Portugal, and Argentina. The company added 19 million net new subscribers in the fourth quarter, taking its membership tally to over 300 million.

Through Tuesday's close, Netflix shares had gained 80% over the past 12 months, significantly outpacing the S&P 500’s 25% return during the same period. The stock jumped 14% to nearly $995 in after-hours trading.

Below, we take a closer look at Netflix’s chart and use technical analysis to point out key post-earnings price levels worth watching.

Stock Bottoms at 50-Day Moving Average

After setting a record high in early December, Netflix shares retraced as much as 13% before bulls stepped in just below the 50-day moving average.

While the stock failed to close above the popular indicator ahead of the quarterly results, trading volumes registered their highest level since mid-October, suggesting that some larger market participants had positioned for post-earnings volatility.

Let’s turn to Netflix’s chart to forecast how a new uptrend in the stock may play out and also identify two major support levels worth watching during pullbacks.

Bars Pattern Analysis

Investors can speculate how a new uptrend may take shape by applying bars pattern analysis, a technique that studies prior trends to predict future price moves.

When applying the tool to Netflix’s chart, we take the price bars comprising the stock’s trending move from August to December last year and overlay them from this month’s low.

This analysis forecasts a potential upside target of around $1,285 and indicates that a new trend may play out until late May if price action rhymes with last year’s move higher. We selected the prior trend as it immediately followed a correction of over 10%, setting the stage for similar move to reoccur after the stock’s recent drop.