Trade of the Day: Walt Disney Co (DIS)

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Walt Disney Co (NYSE:DIS) has been struggling since its disappointing earnings announcement a few weeks ago. The stock dropped to $101 in the aftermath of the announcement and has been consolidating ever since.

With the stock hitting resistance at the top of that consolidation range, we think it is a great time to enter a new bearish trade on the company. We are looking for the stock to drop back down to its post-earnings lows of $100.50 (or lower).

DIS has been struggling with its media networks — especially ESPN — for a while now, but with revenue dropping, the company is planning major shifts. It announced it will be pulling all of its movies from Netflix, Inc. (NASDAQ:NFLX) to launch its own Disney-branded streaming service in 2019. It is also planning to launch an ESPN-branded streaming media service in 2018.

We’re not sure what longer-term impact these moves are going to have on the stock, but in the short term (especially if the S&P 500 starts to pull back again), we anticipate DIS is going to continue struggling to boost revenues as more and more consumers keep cutting their cable cords.

‘Buy to open’ the DIS October 100 Puts (DIS171020P00100000) for a maximum price of $1.55.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

Most recently, John and Wade are co-options strategists of Turbo Trader Live — a live, interactive trading room service that runs two hours every trading day the market is open. Turbo Trader Live focuses on long call and put options, as well as long and short vertical spread strategies. Find out how to get in on the live trading action and start making real profits by clicking here.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/trade-day-walt-disney-co-dis-2/.

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