Identifying Disney's Promising Technical Setup Ahead Of Breakout
by Mike Paulenoff
February 11, 2024 • 12:02 PM EST
This past Monday (Feb 5), one of our MPTrader members inquired about Disney (DIS): "Is Mickey and the gang making a comeback?"
Our response: "Technically, the answer is Yes! We can make a compelling argument that DIS has carved-out a 9-month rounded base formation (Inverse Head & Shoulders, anyone?) that for the last several days has been digesting its January gains from 88.69 to 97.93 perhaps ahead of Wednesday's (12/07/24) catalyst: Quarterly Earnings. The current promising technical setup argues that barring a disastrous earnings report or the unveiling of some unknown negative factor, DIS is positioned to react positively to the news, which will trigger an initial pop to 102-104, and if taken out, then toward 112-114 thereafter in a move that will represent a clear indication that Disney's problems are behind it... Last is 96.86..."
Fast-forward to Wednesday afternoon (Feb 7) in the aftermath of earnings: Investors (and the algos) reacted very positively to Disney's quarterly report, and whatever additional forward-looking business nuggets CEO Bob Iger discussed with reporters during his post-earnings interviews. The earnings news morphed into a very bullish catalyst that propelled the stock to a high of 112.77 during Thursday's session, a full 16.4% above where DIS was trading at the time of our post two days earlier, and right in our projected upside Target Window. See our 4-hour chart.
What's next for DIS -- upside continuation or a period of digestion and pullback? Will a pullback represent another buying opportunity?
Join me and our MPTrader member community for our ongoing opportunistic intraday technical and fundamental discussions about DIS and many other individual equity names, as well as the Magnificient 7, Sector ETFs, macro index ETFs ahead of CPI and PPI this coming week, commodities, and Bitcoin.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts
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