The Walt Disney Co. (DIS) is the 'Stock of the Day' at Real Money. The stock was trading firmer in pre-market activity Wednesday as their fiscal Q1 earnings beat on the top and bottom lines along with streaming numbers that kept soaring to 26.5 million (I have yet to sign up). We looked at the charts of DIS the other day and wrote that "I have no special knowledge of what DIS is going to report or announce but the charts and indicators currently show the possibility for further weakness. Stay nimble."
Let's check in with DIS once again.
In this daily bar chart of DIS, below, we can see that prices soared higher in the past couple of days in advance of the earnings release. Was this due to nervous shorts? Or strength in the broad market? Or buying ahead of the numbers? Who knows but it takes some of the upside surprise out of the numbers. The price action with DIS going from up to down on the day could be a one-day reversal. We don't know where prices will close at the bell but a reversal is a possibility.
The indicators are not displaying much change from our last inspection except the MACD oscillator is likely to generate a cover shorts buy signal.
In this weekly bar chart of DIS, below, we can see that prices moved back above the rising 40-week moving average line. The weekly OBV line is trying to move higher and the MACD oscillator narrowed slightly.
In this Point and Figure chart of DIS, below, we can still see a potential downside price target. A trade at $147.95 is probably needed to turn the chart more positive.
Bottom line strategy: DIS looks like it might retest the $140 level in the near-term. If that area holds we could see renewed strength but if we see prices slip lower then even more selling is possible. Stay nimble.
