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

Walt Disney

DIS
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.