The recent rally in shares of Disney stock (DIS) has been good for investors and traders alike. But will the momentum be enough to carry DIS higher yet?
That question comes directly from the chart below of Disney stock price. As you can see, the stock has rallied back to an important point. How it does here may play a role in DIS performance over the weeks ahead.
Here’s the breakdown:
- The post-2011 Up trendline, stemming from the October 2011 low, had served as support for over 4 years, including touches in November-December 2012, January 2013, August-September 2013, October 2014, August 2015 and briefly in January 2016.
- DIS price broke below the trendline in mid-January, leading to an immediate 14% drop.
- Price has since recovered and is now testing the underside of the broken post-2011 Up trendline near the $105 level.
- If the stock can convincingly reclaim the top side of the trendline, its immediate upside potential opens up considerably.
- Failing to reclaim the top side of the trendline keeps a cap on the trajectory of Disney’s post-February rally.
Note that Disney (DIS) reports earnings next month (May 10). That very well could be the catalyst to decide the next sizable move. Thanks for reading and have a great weekend.
Twitter: @JLyonsFundMgmt
The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
