Technical Analysis: Disney Shows Us Why It’s Key To Look At The Monthly Chart

TL;DR

Disney stock is breaking out of a cup with handle base, but investors should be cautious due to a declining relative strength line and upcoming financial challenges.

Transcript

today on technical analysis we're talking disney the dow stock is breaking out today on an analyst upgrade when you're looking for stocks to buy seeing that stock in proper buy range is obviously key but it's also important to get the big-picture perspective of a stock by looking at the weekly and even the monthly chart in addition to the daily cha... Read More

Key Insights

• 🎚️ Disney stock has been in a sideways pattern for years, with a ceiling at the 120 level.
• 🫥 The declining relative strength line suggests underperformance compared to the S&P 500 for the past four years.
• 🫥 The breakout on the daily chart comes with above-average volume, but the weak relative strength line remains a concern.

Questions & Answers

Q: Why is it important to look at the monthly and weekly charts in addition to the daily chart?

Looking at multiple time frames gives a big-picture perspective of a stock's performance and helps determine if it's in a proper buy range. The monthly chart reveals Disney's underperformance, while the daily chart shows the breakout.

Q: What is the significance of the declining relative strength line for Disney stock?

The declining relative strength line indicates that Disney has been underperforming the overall market. It's ideal to focus on stocks that are outperforming the market, making the weak relative strength line a concerning factor.

Q: What challenges does Disney face in terms of its financials?

Disney's bottom line fell three percent last quarter, and analysts expect a further decline of four percent in 2019. While there is a projected growth of two percent in 2020, it remains modest. The impact of upcoming films, Star Wars Park, and Disney Plus on the company's financials is yet to be seen.

Q: What is the significance of the upcoming Investor Day for Disney?

Disney's Investor Day is expected to reveal more details about Disney Plus, which could impact investor sentiment. It's a crucial event for investors to gather more information before making a decision.

Summary & Key Takeaways

• Disney stock has been in a sideways pattern since 2015, with a relative strength line showing underperformance compared to the S&P 500.

• The stock is currently breaking out of a cup with handle base on the daily chart, but the relative strength line remains weak.

• Analyst sentiment is positive, with an upgrade and increased price target, citing a strong pipeline of upcoming films, Star Wars Park launch, and Disney Plus streaming service.