It’s been a roller coaster of a market lately. But after a fear-inspiring price plunge and potential corrective bottom; the price for admission in Walt Disney Co (NYSE:DIS) stock looks like a good value — both on and off the DIS stock price chart. Let me explain.
In some ways it’s almost been like watching paint dry in 2018 for DIS stock with shares up less than 1% on the price chart. Still, compared to the Dow Industrial, which is off more than 5%, that might not seem like such a bad thing, right? Regardless, if you’ve been patiently holding Disney or are just now eyeing the House of Mouse, the good news is shares have the earmarks of a breakout year in 2019.
Bottom and top line, while DIS stock hasn’t done much, the same can’t be said off the price chart. In a record-breaking year for Hollywood, Disney franchises such as Avengers, Black Panther and Incredibles continued to make box-office gold in 2018. And Disney’s theme parks are still the most popular on the planet as well. But that’s not all.
DIS stock’s drawn-out and anxiously-awaited acquisition of 20th Century Fox and its valuable media assets is set to complete in early 2019. And with Disney’s streaming service Disney Plus also coming online later next year to compete against the likes of Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN); 2019 is shaping up to be a strong one for the entertainment giant.
Sure and as InvestorPlace’s Vince Martin recently wrote, Disney still has an ESPN problem. But as we can also appreciate, overall business at the House of Mouse is far from dead. And given that shares have been on ice or sitting Frozen the last three-plus years; the business of fun for DIS stock bulls looks very good for 2019.
DIS Stock Weekly Chart
As Vince Martin noted, there’s a lot that ‘could’ go wrong at Disney due to its one-time sacred cash cow ESPN. Likewise, there’s a lot of possible hazards on the price chart of DIS stock. Shares did fail earlier this year to break out from its massive triangle base shown on the provided weekly chart. I suppose that’s one example already in the books.
Overall though, Disney is making the right moves off for a breakout year in 2019. The combination of skepticism regarding DIS stock, a lengthy technical consolidation worthy of relative strength leadership and now, a solid-looking hold of pattern support should offer bullish investors a more profitable sequel of sorts with a second breakout to fresh highs and a continued rally.
DIS Stock Trade
For Disney bulls agreeable with what’s been presented, I’d propose waiting for DIS stock to reclaim $109 before going long. With Friday’s high of $108.31 this price level serves a couple purposes.
First, the weekly candlestick which held Disney’s pattern angular support line and the 200-week simple moving average will receive confirmation a low is in place. Secondly, by entering DIS stock as it clears $109 investors are buying shares as they move above the angular pattern resistance line of the triangle.
Lastly, by entering at $109 the price for admission looks all the more attractive given this investor can use the low of the prior weekly candlestick and keep potential losses contained to a manageable 8% of DIS stock risk if a ‘could’ becomes a reality.
Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits.