In February my respected fellow author Noah Kiedrowski recommended that you to take a look at The Walt Disney Company (NYSE:DIS) and supported his view with an extensive analysis of the company, which has quite a positive outlook and sound fundamentals. He has been covering Disney for some time on the Blog and I am sure his focused research could let you find quite useful data about the company.
I spotted an interesting long setup on the Disney chart recently, which confirms Noah’s February outlook and I am happy to share it with you in this post. Now you will have his background analysis augmented with my technical outlook for a 360⁰ view.
Chart: The Walt Disney Company Monthly: Finishing Triangular Consolidation
After examining the long-term chart of this fantastic company, I understood why my colleague admires Disney so much. This stock is like other great companies that are moving all the way up with quite long consolidations. The previous one was observed from 1998 till 2009 with seesaw moves of the wide range between $13 and $44 marks. After it broke loose, the stock just rocketed to the sky-high level at the $122 in 2015 with just minor pullbacks. The RSI then has reached an extremely overbought level at the 88 mark.
The severe drop in August 2015 from $122 down to $90 which was the threshold for another long-lasting consolidation in this stock. The combination of higher tops and higher lows has shaped the notorious Triangle (Symmetric) pattern highlighted in blue. The price has already tested the downside of the pattern this month, and the former stood well so far.
This could be an excellent chance to enter long here as the consolidation has already taken three years to emerge and it approaches the apex of the triangle. The target is set at the widest part of the pattern ($36) added to the breakout point ($113) and is equal to $149. It’s almost a 50% gain, and it could be a good bet as the risk is much smaller if we would cover long below the previous low at $96.
The target is within the uptrend channel that was built using the current low as the second touch point. It is a good sign. Another supporting factor is that the RSI has been relaxed heavily and it hovers around the neutral level, so it now has enough space for another rally soon.
INO.com Contributor, Metals
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.