Technical Analysis #S-Walt Disney Company (NYSE:DIS): 2019-06-18
Disney competitive advantage supports a bullish view for its stock
Analysts point to conservative Disney estimates of subscriptions as the company prepares to launch new services in fall. Will the Disney stock price continue rebounding?
Disney reported $1.61 earnings per share on revenue of $14.92 billion in its fiscal second quarter ended March 30. Both earnings and revenue beat expectations forecast at $1.57 per share on revenue of $14.53 billion. The outperformance was accredited to revenue from its Parks, Experiences and Products segment which rose 5% to $6.2 billion. Morgan Stanley (NYSE:MS) upgraded the stock to buy a week ago, raising their price target on the stock to $160 from $135. Investors are potentially underestimating just how quickly Disney could become a major player in the streaming market, analysts say. Disney is planning to launch its over-the-top streaming service Disney+ on November 12. It has set subscription price at $6.99 per month, while Netflix (NASDAQ:NFLX) 's least expensive plan is $8.99 per month. Morgan Stanley estimates Disney will attract at least 130 million total subscribers by 2024, while Disney forecast total streaming subscribers of 135 million by 2024 at the midpoint of its guidance. Disney competitive advantage over rivals supports a bullish view for its stock.
On the daily timeframe the S-DIS: D1 is rising above the support line. It is above the 200-day moving average MA(200) which is also rising. This is bullish.
The Parabolic indicator gives a buy signal.
The Donchian channel indicates uptrend: it is tilted up.
The MACD indicator gives a bullish signal: it is above the signal line and the gap is widening.
The RSI oscillator is falling but has not reached the oversold zone yet.
We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 142.88. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the fractal low at 133.12. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (133.12) without reaching the order (142.88), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Technical Analysis Summary
- Order Buy
- Buy stop Above 142.88
- Stop loss Below 133.12
Market Overview
- US stocks crawl higher
- Dollar weakened on softer than expected home builder report
US stock market resumed advancing on Monday led by technology stocks as the Federal Reserve started two-day policy meeting. The S&P 500 gained 0.1% to 2889.67. Dow Jones Industrial Average added 0.1% to 26112.53. The NASDAQ Composite rose 0.6% to 7845.02. The dollar turned marginally lower yesterday on reports manufacturing activity in the New York state and home builder confidence declined in June: the live dollar index data show the US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, slipped 0.02% to 97.53 and is lower currently. Futures on US stock indices point to higher openings today.
CAC 40 top performer among European indexes
European stocks extended losses on Monday. EUR/USD turned higher while GBP/USD continued its slide with euro higher currently whereas Pound continues falling. The Stoxx Europe 600 index slipped 0.1%. The DAX fell 0.1% to 12085.82 dragged by 11.6% Lufthansa plunge on earnings warning. France’s CAC 40 however added 0.4% and UK’s FTSE 100 advanced 0.1%.
Hang Seng leads Asian indexes rebound
Asian stock indices are mostly rising today despite US Commerce Secretary Wilbur Ross comment on Monday that President Donald Trump is “perfectly happy” to impose tariffs on the remaining $300 billion of Chinese imports if two countries fail to agree on a deal. Nikkei 225 closed 0.7% lower at 20972.71 with yen resuming its climb against the dollar. Markets in China are gaining: the Shanghai Composite Index is up 0.1% and Hong Kong’s Hang Seng Index is 0.9% higher. Australia’s ASX All Ordinaries Index turned up 0.6% as Australian dollar continued sliding against the greenback.
Brent down
Brent futures prices are extending losses today. Prices fell yesterday: August Brent crude lost 1.7% to $60.94 a barrel on Monday.