An attractive entry point to buy Netflix emerges amid its battle to acquire Warner Bros., charts show
Is it finally time to buy Netflix and chill? Like the product itself, I have been eyeing the chart quite often this winter. Given the streaming giant’s constant battle with Paramount Skydance to acquire Warner Bros. Discovery , we may want to wait. However, the price action is telling us something. When investors thought Netflix won the bidding , we found a floor at the $75 level. When Paramount Skydance upped the bid , Netflix investors actually cheered the news and shares rallied almost 6% on Wednesday. Shares are now back above their anchored volume-weighted average price,or AVWAP, from the day Netflix announced its second bid for the company. While I don’t have a crystal ball as to what Netflix will do next in this battle, defined technical levels of risk/reward appear set for those looking to trade. Over the near term, let’s focus on the one-year daily chart. Shares peaked around early July and then turned lower. Price developed into a broader rounded top formation and broke down, falling as much as 43% from the stock’s high. Near-term price action has turned constructive. A bullish engulfing candle last Friday, positioned shares for Wednesday’s gap higher, signaling a potential shift in short-term momentum. Wednesday also marked the highest one-day rate of change since April 9 — the date of the tariff relief rally and the largest one-day point reversal in S & P 500 history. While the rate of change is not typically a standalone signal generator, this spike suggests renewed optimism and, more importantly, a volatility regime shift in Netflix shares. The intermediate-term setup is improving. This stock has something meaningful to reverse, and the trend direction has begun to shift (using rate of change as a proxy), with momentum indicators turning higher in tandem. The relative strength index sits just under 51 (50.9), placing Netflix back into the classical bullish momentum regime. The moving average convergence/divergence had been flat and whipsawing since the December 2025 Warner Bros. deal announcement, reflecting persistent underlying weakness. Recently, however, we’ve seen a bullish crossover accompanied by a three-period histogram expansion — an early “buy” signal. To frame fair value technically, we anchor AVWAP to the December 2025 Warner Bros. acquisition announcement . That anchored VWAP places near-term fair value and initial resistance around $87, which converges cleanly with the 50-day moving average (roughly $86.50). Look for a rally toward the $85 to $87 zone. That level should determine whether this is merely a relief rally or the beginning of a broader reversal capable of reclaiming key moving averages and re-entering a sustained markup phase. Netflix – five-year weekly Zooming out to the five-year weekly provides clearer structural context. Netflix found strong resistance near $70 at the November 2021 peak. Shares rallied back to that level in July 2024, once again stalling almost to the cent at prior highs. After only a modest pullback, Netflix broke decisively above $70 and advanced to $134 in a steady, multi-year uptrend. That uptrend reversed in July 2025, bringing shares back down toward the same roughly $70 level. Practically a textbook polarity zone. Momentum is beginning to stabilize: RSI has formed a bullish divergence over the past three weeks, making a higher low while price made a lower low. The MACD histogram has been contracting, and with both MACD and signal lines curling higher, a lagging crossover appears increasingly probable. How to trade Given the recent dilution due to the Warner Bros. negotiations, the news will take precedence. The good news is we know our levels of risk. If Netflix loses out on this deal, the lows are likely to be in. If you believe the company will up its bid, then sell at the AVWAP from the first bid in December, which coincides with the stock’s declining 50-day moving average. If Netflix ups its bid, we have two levels of support to watch at $75 and $70. These should be great longer-term entry points. The downside is it will take time — possibly a year — to get this deal done. If you have the time to chill with Netflix, you should be rewarded over the long term. — Jay Woods, CMT with Chase Games DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. 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