Netflix (NFLX) shares hit a new record high on Tuesday after the streaming giant reported a huge increase in advertising revenue, supported by strong demand for ads for its upcoming movies, series and live events.

The California-based company, which launched its cheaper ad-supported offering in November 2022, has focused on expanding its advertising business in recent quarters to generate more advertising revenue from premium live sports and offset the costs of creating original content in a saturated streaming market.

Below, we take a look at the Netflix chart and use technical analysis to identify key price levels to watch for.

Shares remain in the ascending channel

Netflix shares have been on an upward trend since January last year. Most recently, the broad-based sell-off on the stock market on August 5 marked the end of a 13% correction in the stock.

Since then, the price has recovered and re-reached the 50-day moving average. On Tuesday, it gained 1.5% to close at its record high of $698.54.

However, it is worth noting that the upward move occurred amid sluggish trading volumes, possibly indicating a lack of institutional investment.

Looking ahead, investors should keep an eye on several key chart areas where Netflix stock may be of interest.

Lower price levels to consider

A first area that could come into play on retracements is around $638. At this level, buyers could defend a horizontal line that connects a series of comparable trading levels between March and early August.

A breakdown below this area could trigger a decline to the lower support level at $545, a spot on the chart where investors could look for entry points near the January 24 breakaway gap close and the April swing low. This region is also currently near the lower trendline of the ascending channel.

Higher price levels to watch

A short-term upside momentum could see shares test the $724 level, where they could face selling pressure near the upper trendline of the ascending channel. Moreover, there is an increased chance of profit-taking in this area as the Relative Strength Index (RSI) is in overbought territory above the 70 overbought threshold.

To predict a possible price target above the stock’s record high, we can use a bar pattern. To do this, we extract the stock’s trend movement from May to July and apply the August low pattern, which predicts a price target of around $743.

The commentary, opinions and analysis expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more information.

At the time of writing, the author does not own any of the securities mentioned above.