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Bearish forecasts for Netflix’s stock have resurfaced after the bears confirmed a megaphone top pattern on the daily chart. The pattern’s lower boundary broke down on Wednesday, and an attempted recovery on Thursday was rejected at this same level. Friday’s 1.08% decline suggests that the stock is likely to continue moving downward, consistent with the expectations of the expanding triangle or megaphone top pattern.
Currently, 36 institutional analysts still recommend buying the stock, with a 12-month price target of $502.50, representing a potential 40.4% upside from current levels. This recommendation has remained unchanged since March. However, it appears that the situation might worsen before it improves, as Netflix has now lost all gains made since March 17. The losses could deepen if the bears manage to break through a key support level at 354.13.
The completion of the megaphone top pattern on the daily chart indicates a potential further decline. The recent breakdown of support at 366.87 confirms this outlook, suggesting a move toward 340.48 as part of the pattern’s measured move. For this to happen, bears would need to break the support at 354.13, which marked the lows on February 24 and March 17. A continued decline below this level could push the stock toward 331.16, the low from March 14, or even 321.59.
On the other hand, if the stock bounces off the current support at 366.87, it could rise toward 374.57. For the bulls to regain control, they would need to break through this resistance and aim for 395.29, a critical level that could signal a recovery and invalidate the bearish pattern. If the bulls manage to surpass the 395.29 resistance, the next targets would be 412.51, 431.43, and 445.06, though these levels are currently beyond the bulls’ reach.