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(Photo by Mark Ashman/Disney Parks)
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Walt Disney
DIS
traded sideways between $189.22 on May 3, 2021 and $187.58 on September 9, 2021. A death cross formed on September 2, 2021, and this was the sell signal that began the decline to as low as $126.82 on April 18, 2022.
This month the stock is stabilizing around its monthly pivot for April at $131.78. This began on April 6 and the low has been $126.82 on April 18. The death cross remains in play with the 50-day and 200-day simple moving averages at $140.22 and $159.72.
Disney is not a value stock. Its p/e ratio is elevated at 43.2% and it does not offer a dividend, according to Macrotrends.
The company beat earnings-per-share estimates on February 9 but missed on the prior quarter reported on November 10, 2021. Their next earnings release will be after the closing bell on May 11.
Many analysts on Wall Street have been recommending Disney all year long even as the stock trades lower and lower. According to Proprietary Data Insights, Disney is the second most searched stock among the entertainment sectors.
The Daily Chart for Disney
Daily Chart for Walt Disney
Courtesy of Refinitiv Xenith.
The daily chart for Disney shows the trading range that ended after a death cross formed on September 2, 2021. This occurred when the 50-day simple moving average fell below the 200-day simple moving average. This sell signal tracked the stock to its April 2022 lows.
The huge price gap lower on November 11, 2021 was caused by the earnings miss that occurred after the close on November 10.
The stock is well below its 50-day and 200-day SMAs at $140.22 and $159.72.
The horizontal lines at the top of the chart are the semiannual and annual risky levels at $176.26 and $180.54, respectively. The horizontal line near the bottom of the chart is the monthly pivot at $131.78.
The Weekly Chart for Disney
Weekly Chart for Walt Fisney
Refinitiv. Courtesy of Refinitiv Xenith.
The weekly chart for Disney is negative. The stock is below its five-week modified moving average at $136.52 with its 200-week simple moving average or “reversion to the mean” at $139.90. The 12x3x3 weekly slow stochastic reading is declining at 21.38 so it’s a week from being oversold with a reading below 20.00. Remember that stochastic values range between 00.00 and 100.00 with a reading above 80.00 overbought and a reading below 20.00 oversold.
Trading Strategy: Buy Disney on weakness to its weekly value level at $122.25. Reduce holdings on strength to its 200-day simple moving average at $159.727.
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