It has not been the typical ride that long-term Disney (DIS) bulls have seen in the stock price over the past few years.
Shares of Disney traded sideways from 2015 until April 2019. That’s when it unveiled its streaming plan, which has now become the trio of Hulu, Disney+ and ESPN+.
The company has had tremendous success with these platforms, boasting 129.8 million subscribers as of Disney’s most recent quarterly update.
In any regard, the stock was trading pretty well until Covid hit in the first quarter of 2020.
Despite the damage to its parks, studio and cruise ship businesses, Disney shares ultimately erupted off the Covid lows, rallying from $81 to more than $200 in less than a year.
Now reality is again catching up to the House of Mouse.
Trading Disney Stock
Chart courtesy of TrendSpider.com
At the recent low, Disney stock was down more than 36% from the highs made more than a year ago.
Lately, it’s been trending -- not only because travel is picking up and it’s spring break, but because of factors including political talk surrounding Florida’s "Parental Rights in Education" legislation -- the “Don’t Say Gay” bill.
It's hard to know whether these discussions are hurting the stock and by how much. But I’m not a narrative trader; I focus primarily on price. And as I look at the chart, I see a fairly mixed bag.
Before Thursday's dip — the stock was down about 1.5% as of noon U.S. Eastern — the shares were trying to regain the 50-day moving average. If they were able to do that, it would have opened the door for a potential rally up to the March high and the $150 area.
Those levels aren't off the table, but to get there Disney stock needs to take out this week’s high and the 50-day first.
On the downside, the shares are dipping below the 200-week and 10-day moving averages. The big concern is this week’s low. Should Disney stock break below this mark at $136.28, it not only loses this week’s low, but also last week’s low.
If the selling picks up in the scenario, I find it hard to avoid looking at the $128 to $130 zone. Disney stock came oh-so-close to filling that gap at $128.04, but came up a little short a few weeks ago.
Now we see whether Disney can consolidate the gains and hold this week’s low. Otherwise lower prices may be in store again.
