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?
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Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts
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