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Why Netflix will continue its 'heroic' rally: Technician

Netflix is at record highs with investors eagerly waiting to hear if the stock will split. But according to one top technician, the stock's chart is already showing signs that more upside may be ahead.

The company has its annual meeting Tuesday, where it is expected to announce a stock split. Shares of the streaming video juggernaut opened Tuesday at $627.34 and rallied 3 percent during the day. Some traders expect further gains are on the way.

"The stock has got almost another $90 of upside to $730," said Richard Ross, head of technical analysis at Evercore ISI. "I would still be a buyer today even with the stock at a fresh all-time high."

According to Ross' chart, Netflix has developed a base of support over the past nine months. The stock broke out above that base in May.

Netflix
Andrew Harrer | Bloomberg | Getty Images

"That really set the stage here for this heroic move higher," he said. "You can see we've been climbing steadily higher in stair-step fashion."

Ross is also encouraged by two recent bullish gaps in the Netflix chart. That occurs when a stock's trading range one day is completely above its previous day, a bullish sign for technical analysts.

"Gaps typically come in threes so I think we're set for another gap to the upside," he predicted. "With their hit show 'Orange Is The New Black' out this week, we have a potential fundamental catalyst to unlock a very bullish technical setup. That's why I think Netflix could get us all the way up to $730, almost another $90 of upside."

Netflix shares have nearly tripled in the past two years and are up more than 4,000 percent in the last 10 years, an average annual gain of 45 percent.

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