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Can Netflix Handle Competition? Market Appears Concerned

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Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Netflix, Inc. (NASDAQ: NFLX) shares are trading lower by $11.60 at $649.33 in Monday's session. The S&P 500 index's top-performer year to date has been under selling pressure since the open.

The catalyst for the decline may be the reported announcement that Alibaba Group Holding Ltd (NYSE: BABA) is set to launch an online video streaming service -- Tmall Box Office -- in two months.

Now, along with, Inc. (NASDAQ: AMZN)'s Prime service and others, there are multiple threats to Netflix's dominance in the space.

The reported announcement by Alibaba on Sunday appeared to instigate a sharply lower opening for Netflix shares, which started near $650 versus Friday's close of $660.93. The momentum continued to the downside as it traded lower until it finally found support at $641.61.

That marks the lowest point for Netflix since it bottomed last Tuesday at $625.34 on its way to its all-time high that was made the following day at $692.70. The stock's all-time high close is $671.10.

Since hitting that level, the stock is poised to post its third straight daily decline.

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