Pressure from a key technical indicator could be why Netflix shares are falling, according to a chart analyst.
Source: Kimble Charting Solutions
One chart analyst also sees another bearish chart signal for Netflix stock.
There is a “potential double top” on Netflix’s weekly chart, Kimble Charting Solutions founder Chris Kimble wrote in an email. The highs “appears to be creating a new falling channel with a series of lower highs and lower lows.”
To be sure, Netflix stock’s multimonth decline of more than 15 percent from its June high may primarily be a reaction to the company’s recent unfavorable fundamentals
On July 17, Netflix shares fell 5.2 percent a day after it reported disappointing second-quarter financial results. The company added 5.15 million memberships during the quarter missing the Wall Street consensus of 6.34 million.
But despite the stock’s recent decline Netflix shares have significant cushion so far this year before they underperform the market. Its shares are up 89.4 percent through Tuesday versus the S&P 500’s 8.3 percent gain.
— CNBC’s Fred Imbert contributed to this report.