Netflix stock just flashed multiple crash signals

Core Viewpoint - Netflix shares have entered a bearish phase, with multiple technical indicators suggesting potential further declines despite a year-to-date increase of 23% [1][7]. Group 1: Stock Performance - Netflix stock closed at $1,094, falling below all major moving averages, including the 20-day, 50-day, 100-day, and 200-day, indicating a potential for extended downside pressure [1]. - The stock has dropped nearly 10% in the past week, marking a significant decline [1]. - This is the first time Netflix has fallen decisively below its 200-day simple moving average of $1,114.33 since its long-term uptrend began [2]. Group 2: Technical Indicators - Momentum indicators are showing warnings, with the RSI just above oversold levels, indicating accelerating bearish momentum [5]. - Rising selling volume near support suggests that institutions may be reducing their exposure after a period of consolidation [6]. - The current setup appears weaker compared to previous instances where similar readings led to brief stabilization [5]. Group 3: Financial Performance - In the most recent quarter, Netflix reported a 28% operating margin, which was below the forecast of 31.5%, primarily due to an unexpected tax expense in Brazil [7]. - Netflix has revised its 2025 margin outlook down to 29% from 30% [7]. Group 4: Market Sentiment - The bearish sentiment towards Netflix is attributed to concerns over a weaker-than-expected operating margin and renewed valuation worries, despite positive revenue and earnings guidance [7]. - Increased competition from AI-driven content platforms and backlash over "woke" content, as urged by Elon Musk, has contributed to investor caution regarding Netflix's profitability and valuation heading into 2025 [8].