This Indicator Says Shares Of Netflix Are Going To Keep Rising

Netflix, Inc. NFLX has been on a tear the last two weeks. Since the close on May 18 the stock is up 8 percent to $351 (as of this writing), blowing past its previous all-time high of $338 in the process. 

As has been noted elsewhere, the spike has made Netflix a more valuable company than peers Comcast Corporation CMCSA and The Walt Disney Company DIS. When a stock is at all-time highs, the biggest question traders ask changes from "when will it get back to all-time highs?" to "how high can it go?" According to market forecasting software VantagePoint, the answer is higher still. 

A Bullish Crossover

Shares of Netflix had previously hit an all-time high in mid-April, but that was followed by a brief downturn and some sideways movement. On May 7 however, the software indicated that the stock was ready to breakout. 

You can see that on the chart below. The blue line represents a predicted moving average, while the black is a simple 10-day moving average. A crossover of the blue line over the black indicates the beginning of a bullish trend (and vice versa for bearish). Note the crossover in mid-May. 

Since that day the stock is up over 9 percent. Something else to pay attention to is how far apart the two moving averages are. The more they diverge, the stronger the trend is. In Netflix's case, the uptrend only appears to have gotten stronger, especially in the last two weeks. 

The gray candle on the far right of the chart represents NFLX's predicted range for Thursday, which serves as another confirmation. We'll be watching to see if these lines converge at all to indicate the strength is coming to an end. 

VantagePoint is a content partner of Benzinga. For a free demo click here.