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The shares of Netflix Inc. have fallen long enough and long enough to produce their first "cross of death" model in almost three years and become the third member of the former darling of the FAANG technology to suffer this downward technical fate.
A cross-mortem refers to the time when the 50-day moving average of a price chart, seen by many as a short-term trend indicator, falls below the 200-day moving average, which many recognize as a dividing line between upward and downward trends. Technicians believe that the cross bears the beginning of a short-term downturn that leads to a long-term bearish trend.
Netflix shares
NFLX, -5.45%
Afternoon trade fell 5.5% on Monday to their lowest level since Feb. 14. The stock plunged 35.4% since closing, peaking at a record high of $ 418.97 on July 9th. It is located in a bear market, defined by many as a 20% or more of a bullish high, since July 30th.
With this sale, the 50-day moving average (50 days) decreased from $ 337.173 Friday to $ 335.617, while the 200-day moving average (200 days) reached $ 336,249 from $ 336,167.
FactSet, MarketWatch
The last time the 50-DMA was below 200-DMA, it was October 7, 2016; The last cross of death appeared on February 23, 2016. The title was not down after the last death cross appeared four months later, on June 27, 2016.
Among the other original actions of FAANG technology, Facebook Inc.
FB -5.72%
had a death cross that appeared on September 20th and Google-parent Alphabet Inc.
GOOGL, -3.82%
cross of death last Thursday, while Amazon.com Inc.
AMZN, -5.09%
There were still weeks left before forming one. Shares of Apple Inc.
AAPL, -3.96%
an honorary member of FAANG, was also in a few weeks.
Do not miss: The title of Google parent Alphabet becomes the second FANG to produce the "cross of death" and Netflix is the next.
Meanwhile, the Nasdaq composite index
COMP -3.03%
which counts all the stocks of FAANG as components, will probably produce its first cross of death since January 2016 during the week following Thanksgiving. The index still has some way to go before entering a bear market, as it closed Monday at about 13.3% below its August 8 record, closing at 8,109.69.
Read also: A death cross is forming in a small cap index for the first time in about two and a half years.
The Nasdaq 50-DMA fell from $ 7,618,871 to 7,600.957 on Monday, while the 200-DMA went from 7,515 to 159 to 7,515.501. Based on average daily average moving average change rates this month, a cross of death may appear at seven other trading days or on November 29th.
The S & P 500 index
SPX, -1.66%
and the Dow Jones Industrial Average
DJIA, -1.56%
are still a few weeks away from a cross of death.
If that was not enough, the actions of Facebook, Amazon, Netflix and Google parent Alphabet all closed Monday to bear markets – Alphabet entered a bear market Monday for the first time in seven years – and Apple briefly dived into the territory bearish before the day rebounded to nearly 19.9% below its record.
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