Disney Shares Are Bottoming. Here’s How To Buy And Sell The Stock Now

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Walt Disney

appears likely to bottom out at or just above its monthly value level for July at $85.02. The stock is below a death cross on its daily chart with its 50-day and 200-day simple moving averages at $92.11 and $96.79. The weekly chart shows Disney oversold and a weekly close above its five-week modified moving average at $90.89 would be a positive.

Disney’s theme parks are experiencing slowing visitors traffic, which has kept the stock weak so far in 2023. I think that a positive is that Bob Iger, the CEO of Disney, is having his contract extended until the end o 2026, two years longer than expected. His restructuring plan continues to include thousands of layoffs. The slowdown of streaming subscribers remains a concern.

Disney is not a value stock. Its p/e ratio is elevated at 27.04% and it does not offer a dividend, according to Macrotrends. The company beat earnings-per-share estimates in four of the past six quarters.

The Daily Chart for Disney

The daily chart for Disney shows the long-term downtrend of 58.5% from the high of $203.02 set on March 8, 2021 to the low of $84.07 set on December 28, 2022. The 2023 high of $118.18 was set on February 9, 2023.

A death cross formed on September 17, 2021. This sell signal was at $171.17. Remember that a death cross forms when the 50-day simple moving average declines below the 200-day simple moving average. This sell signal ended on March 14, 2023 when the close was $93.36.

Another death cross occurred on April 13, 2023 with the stock closing at $100.84. The 2023 low has been $87.01 set on May 30.

The horizontal lines from low to high are the monthly value level for July at $85.02, this week’s value level at $87.64, and the semiannual risky level at $110.99. The 50-day and 200-day simple moving averages are $92.10 and $96.79.

The Weekly Chart for Disney

The weekly chart for Disney is negative but oversold. The stock is just below its five-week modified moving average at $90.89. It’s well below its 200-week simple moving average or ‘reversion to the mean’ at $132.95. The 12x3x3 weekly slow stochastic reading is declining at 15.28 so its becoming extremely oversold. 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 $87.64. Reduce holdings on strength to its semiannual pivot at $110.99.

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