Technical analysis
Price | $ 138,96 | 52 weeks range | $ 128,38 - $ 191,67 |
Beta | 1.17 | Volume/ average | 1.3m/ 9.6m |
Sector | Communication | Dividend | 0,52% |
The Walt Disney Company is an American multinational entertainment and media company headquartered in California.
DIS after the nearly $ 203.00 hit in March 2021 has started a slow and gradual decline which we believe will soon reverse to the upside.
Price
Analyzing the current price at $ 137.64 we can see the regularity with which the stock is moving: the bearish trend lines are in fact very respected.
The current price falls within the range that played the role of resistance during 2020, and which once exceeded gave rise to the strong rally that took the stock to an all-time high.
On the weekly chart, this distinction is even more evident: the $ 130-135 area represents a strong level of support for the stock.
We believe that a gradual breach of the $ 145.00 threshold can then identify the next target in $ 160.00: a level that coincides with the main downtrend line and which, if exceeded, could lead to a reversal of the medium-term trend.
Indicators
Looking at the MACD and RSI indicators: both show a strong positive divergence with the price fluctuation. In particular, if we look at the fluctuations that began on November 30, 2021, we can see a price with decreasing lows and indicators with increasing lows.
This divergence, also present on the weekly chart, confirms the thesis of a possible trend change in the short-medium term: looking at the historical price, similar scenarios have then generated interesting upward performances.
Moving averages
We believe that the strong watershed for short-medium term fluctuations is in this case the 50-day average (yellow): in recent months the latter has played the role of "mobile resistance", rejecting any possible extension of the stock. At the moment the average is at $ 144.00 which we believe is an interesting point for possible trend changes: a consolidation above this could result in a possible entry range.
The second average we take into consideration is the 200-day average (green): in this case, we believe that the average can play the role of a medium-term target or a price range in which to increase exposure to DIS.
Conclusions
At the current price we believe that DIS is a very interesting stock to monitor and to build a position on subsequent price confirmations.
The stock is currently at the bottom of the bearish channel and, in our view, is forming the basis for an interesting trend reversal. The first obstacle to overcome concerns the 50-day average which played the role of “mobile resistance”. Subsequently, $ 168.00 currently represents the upper part of the bearish channel: its possible break would lead to a very important trend change and the upward revision of the profit target.
A first strategy could lead to the purchase of the stock once it has consolidated above the 50-day average.
A second strategy could go to value a buy in case the price drops further to $ 120-125.00.
The concomitance of a strong support level with positive divergence between price indicators made the Disney stock attractive again despite being currently in a bearish trend.
Medium-long term conservative target, possibly to be re-evaluated once $ 170.00 is reached.
Macro-economic context, available upon request.
Entry range $ 145 - $ 148,00
Target 1 $ 168,00
Target 2 $ 180,00
Stop loss $ 125,00
Graphs
OTB Global Investments
25 March 2022
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