NFLX Weekly Reversal: Path to $123 📈

Netflix (NFLX): Bottom Is In!

NFLX: 200 SMA Bounce & Fundamental Discount.

📌 Market Context & Technical Breakdown
After a prolonged corrective phase, Netflix (NFLX) is showing strong technical and fundamental signs that its long-term bearish trend is near completion. The price action on the weekly chart is aligning with multiple confluence factors pointing toward a major bullish setup:

1. Rebound from 200 SMA & Wedge Bottom
Key Moving Average Support: The price recently tested and respected the 200-Period Simple Moving Average (200 SMA) on the weekly chart , which serves as a long-term macro trend floor.

Falling Wedge Pattern: NFLX has been contracting inside a multi-month descending wedge. The stock recently bounced cleanly off the bottom trendline of this structure, confirming robust demand at these structural lows.

2. Bullish RSI Momentum Divergence
Momentum Shift: While price printed lower lows into the bottom of the wedge, the RSI (14) registered distinct higher lows on the weekly chart.

Exhaustion Signal: This classic bullish divergence signals that seller exhaustion has set in, paving the way for buyers to initiate a new macro uptrend.

📊 Fundamental Valuation: Deep Discount
In addition to the technical reversal pattern, NFLX offers an attractive valuation metric for long-term investors:

P/E Ratio Compression: NFLX currently trades at a P/E of 23.32, which is historically very low compared to its long-term historical average P/E of 59.93.

Intrinsic Value Estimate: Based on an intrinsic value calculation of $120.00, NFLX is currently trading at roughly a 40% discount to its fair value.

🎯 Price Scenarios & Action Plan:
🟩 Scenario 1: Primary Path (High Probability)
Execution: Breakout and continuation through upper wedge resistance.
Targets:
Target 1: $90.00 (First major resistance / structural level)
Target 2: $103.00 (Key psychological & intermediate target)
Target 3: $123.00 (Major resistance coinciding with intrinsic value area)

🟦 Scenario 2: Deep Retest / Aggressive Buy Zone (Low Probability)
Trigger: A secondary market-wide pullback pushing NFLX down toward the $60.00 support level (bottom of the wedge).
Execution: Aggressive Buy Zone.
Next Targets: Upon holding $60.00 support, price is projected to resume the macro bullish path toward $90.00, $103.00, and $123.00.
Rationale: While the probability of retesting $60 is low given current momentum signals, any dip to this zone presents a prime, high-R/R accumulation opportunity for long-term investors.

🛡️ Risk Management Strategy
Approach: Long-Term Buy & Hold

Stop Loss: None Set

Rationale: Given the long-term investment horizon, deep fundamental undervaluation (~40% discount), and strong macro support at the 200 SMA, short-term market noise and volatility will be absorbed without setting a strict technical stop loss.

💡 Key Takeaway for Investors
The confluence of the 200 SMA support, wedge pattern bounce, weekly bullish RSI divergence, and a ~40% fundamental discount relative to intrinsic value indicates that the macro downtrend is nearly over. Investors should monitor the upper wedge breakout for continuation toward $90, $103, and $123.