Despite news that its most popular show would no longer be available on the streaming service beginning in 2021 and that one of its top creative directors was jumping ship for Disney (DIS), shares of Netflix (NFLX) have managed to rally today and are actually slightly outperforming the broader market. While NFLX is higher today, the stock remains stuck in a major trading range between the mid-$330s and mid-$380s. That may sound like a wide level, but believe it or not, the current 14% trading range that NFLX has been stuck in for the last 100 trading days is the narrowest in the stock’s history. For some perspective on how the current range compares to history, NFLX’s average 100-trading day range has been 78.1% or more than 5 times the current range! You may also recall that just two weeks ago, we also highlighted the narrow range in the stock, and since then the range has narrowed by another five percentage points.
So what happens following periods when NFLX trades in a narrow range? In the 16 years that NFLX has been public, there has only been one other time where the stock traded in a 100-trading day range of less than 20%. That one period was in 2017, and while it doesn’t get any smaller than a sample size of one, that period ended up being a short period of consolidation before continuing higher. A key difference between the two periods, though, is that back in 2017, the sideways range followed a new all-time high in NFLX’s price, while the current sideways range comes more than a year after the stock last hit a high. Start a two-week free trial to Bespoke Institutional to access our entire suite of research services.