Add some happiness to your portfolio by sprinkling in Disney stocks | Don’t ignore this chart!

Disney (DIS) may be the happiest place on Earth, but its stock price doesn’t reflect similar sentiments. Behind the scenes, Disney had problems ranging from internal board fights and political disagreements to disappointing box office returns. Given that the stock has broken out of a downtrend, is this a stock you should add to your chart list and jump on when the opportunity presents itself?

Weekly view

The weekly chart of Disney’s stock price (see chart below) shows just how badly the stock has fallen. Disney’s stock price is underperforming compared to the performance of its subsector, the Dow Jones US Broadcasting & Entertainment Index ($DJUSBC) (top panel).

Chart 1. Weekly chart of Disney stock. Disney shares have fallen more than 50% since hitting a record high in March 2021. Is the stock showing signs of a breakout?Chart source: StockCharts.com. For educational purposes.

Since hitting bottom in October, the stock has risen slightly and briefly surpassed the 50-week simple moving average (SMA). However, the stock is struggling to stay above the moving average.

Disney stock prices are still falling, so it is premature to open a long position. However, given that the stock has a lot of upside, it may be worth watching. stochastic oscillator It crossed the 50-week MA, indicating overbought conditions, but momentum quickly waned. The stock is down slightly and is currently trading below its 50-week SMA, while the Stochastic Oscillator is trending lower. This indicates that the uptrend is short-lived. But much of that movement will depend on the performance of the broader index.

daily view

Disney was filtered from StockCharts’ Bullish 50/200-day MA crossover scan. Looking at the daily chart (see chart below), the stock is trading above its 50-day, 100-day and 200-day SMA, with the 50-day SMA crossing above its 200-day SMA, known as the golden cross. .

Chart 2. Disney stock daily chart. The stock is moving sideways within the rectangle shown on the chart. To see an upward move, look for a breakout above the rectangle. A drop below the 200-day SMA could signal further weakness.Chart source: StockCharts.com. For educational purposes.

The following key points to note in the chart:

• Disney stock is trading sideways within the green rectangle shown on the chart. The stock is trading at the bottom of the rectangle. The low of the rectangle or the 200-day SMA can act as a support level for the stock. To see any type of recovery in a stock price, the price must bounce off that support. A fall below the support line could signal weakness and a return to the October/November lows.
• The Stochastic Oscillator indicates that the stock is oversold and its Relative Strength Index (RSI) is below 50.
• A relatively large range in the last bar of the chart is a cause for concern as it may indicate seller dominance.

conclusion: DIS is at a critical support level. The stock could go either way, but if it holds support, there’s a chance the stock could go higher.

Will the Mouse House find happiness again?

In the stock market, change happens quickly and unexpectedly.

If Disney resolves its internal problems, we will see its sluggish stock price rise. It is making changes to recover its investment in streaming services and turnaround its theme parks. It’s yet to be seen whether these changes will help the company and its stock price.

Look at the top of the rectangle on the daily chart. If the price breaks above the rectangle, the stock could be a promising long-term play. These stocks are worth adding to your ChartLists and checking them regularly. If there are any signs of an upward trend, you won’t want to miss out on your journey to the happiest place on Earth.

disclaimer: This blog is for educational purposes only and should not be construed as financial advice. You should not use any of our ideas and strategies without first evaluating your personal and financial situation or consulting a financial professional.