Netflix shares peaked on July 1 and entered a corrective phase, declining from $1,341.15 to a low of $1,144, near the 38.2% retracement level. After bottoming on August 5, the stock began to recover, overcoming hurdles like the 50-hour and 100-hour moving averages, and is currently contending with the 200-hour moving average.
The stock’s performance tomorrow is critical for sustaining its rally, potentially targeting a 50% midpoint at $1,242.93, though failing to stay above the 200-hour moving average could result in a pullback to the $1,200 area. Netflix’s strong content lineup, including Squid Game Season 3 and other popular series, has contributed to robust viewer engagement and subscriber retention.
Netflix plans to maintain its momentum with upcoming releases such as Wednesday Season 2 and various high-profile originals. The company’s “local for local” strategy has led to a €1 billion commitment to Spanish programming, enhancing its presence in international markets. Additionally, its growing ad-supported tier and foreign exchange gains have helped boost international sales, prompting a raised revenue forecast for 2025 to between $44.8 billion and $45.2 billion.
From our perspective on August 12, 2025, Netflix is at a critical technical juncture after bouncing from its early August low. The stock is currently fighting to stay above its 200-hour moving average, a key battleground. A sustained move higher could target the $1,242.93 level in the coming weeks.
Traders with a bullish outlook should consider buying call options, as a decisive break above the current resistance could spark a quick rally. Looking at recent options data, 30-day implied volatility for Netflix has settled near 29%, down from over 35% during the July sell-off, making these calls relatively cheaper. We would focus on September expirations with strike prices around $1,250 to capture a potential move toward the 50% retracement target.
For those who are more cautious, a bull call spread could be a prudent way to position for upside while limiting cost and risk. One could buy a call with a $1,220 strike and simultaneously sell a call with a $1,250 strike, defining the potential profit zone. Trading volume from yesterday’s session showed a significant increase in open interest for calls between the $1,220 and $1,250 strikes, suggesting this is already a popular strategy.
We must also respect the risk of failure at this technical level, which could send the price back toward the $1,200 support area. To hedge a long position or to speculate on a downturn, buying put options with a $1,200 strike expiring in late August would be a direct strategy. We saw a similar technical setup in late 2024, where a failure at the 200-hour moving average after a strong rally led to a swift 10% decline over the following week.
This trade happens within a very bullish broader market, with the S&P 500 and NASDAQ hitting new records today and influential voices like Rick Rieder expressing optimism. Netflix’s own fundamentals, including its upgraded 2025 revenue forecast to over $44 billion and strong content slate, provide a strong tailwind. Data showing the ad-supported tier’s continued market share growth, which now accounts for nearly 25% of new sign-ups globally, reinforces this underlying strength and should give traders confidence.
