History is hinting at a breakout for Netflix: Technician

A specific pattern is playing out once more in the charts for Netflix, and Evercore ISI technician Rich Ross says that its repeat signals a breakout for the video streamer.

Ross said Wednesday on CNBC's "Trading Nation" that Netflix's last big rally, which unfolded in 2015, took place when the stock was trading in a range and then bounced after hitting its 100-week moving average. Netflix had been trading between the mid-$40s and high $60s for all of 2014, the "trading range" Ross refers to, before meeting its 100-week moving average line at the start of 2015. The stock then surged 170 percent in the following months.

And now, the technician believes that Netflix shares are currently repeating the same pattern from 2014-2015. The stock has traded in an "18-month trading range" and bounced off its 100-week moving average this past May.

"We have this well-defined trading range, this pullback into the 100-week moving average, and a strong move coming out," explained Ross. "So I think we're going to take out the high end of this trading range and move significantly higher for the stock."

With Netflix sitting at about $128 on Wednesday, if Ross' prediction is correct, Netflix is set to overtake its all-time high of $133.27, which it hit back in December 2015.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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