Shares of Netflix Inc. NFLX, 0.47% shot up 3.8% in afternoon trading Thursday, to break out of recent trading range, to put them on track for the biggest one-day gain in seven months. The streaming video company’s stock was by far the biggest gainer among the components of the SPDR Communication Services Select Sector ETF XLC, 0.69%, which edged up 0.2%, and was the fifth-best performer in the S&P 500 SPX, 0.61%.
The stock’s breakout rally, which is the biggest since it soared 16.9% to its record close on Jan. 20 after fourth-quarter 2020 results, comes a day after the U.S. Securities and Exchange Commission charged three former Netflix engineers with insider trading of Netflix securities. Prior to Thursday’s jump, the stock had seesawed around the 50-day and 200-day moving averages, with both widely watched averages flatlining in a narrow range between $510 and $520 over the past month. On Aug. 16, the 50-DMA crossed back above the 200-DMA, to wipe out the bearish “death cross” pattern that had appeared on June 3. In addition, the 50-DMA rose to $519.79 on Thursday, the highest reading since May 11. Netflix’s stock has edged up 0.2% year to date, whilet the communications services ETF has rallied 10.1% and the S&P 500 SPX, 0.61% has advanced 17.1%.