When you wish upon a star, do you see proper buy points and a great bullish story? If so, you may be thinking of Disney (NYSE:DIS). But if you also know there’s more to what makes a standout investment, DIS stock is still worth the price of admission.
It was only two days ago, when #DisneyPlusfail was one of the top trending items on social media platform Twitter (NYSE:TWTR). Disney’s long-awaited streaming platform Disney+ was unveiled Tuesday and in theory, ready to fight Netflix (NASDAQ:NFLX), Prime from Amazon (NASDAQ:AMZN) and Apple’s (NASDAQ:AAPL) Apple TV Plus. Unfortunately, there weren’t many cheers from happy users during the service’s debut. And some of those subscribers and other haters to be sure, took to Twitter to vent their frustrations.
According to the Disney+ feed on Twitter, demand for the service — more than the company could have dreamed possible — crashed the system. As a result, many subscribers were offered Disney-themed “please try again” signage rather than entertainment from Marvel, Pixar and other Disney content. Yet sometimes all it takes is a day to change what’s trending.
A welcome news release during Wednesday’s trading session rocketed DIS stock higher by nearly 7.5%. Apparently, Tuesday’s minor inconvenience was rooted in more than 10 million subscribers having come on board for Disney’s streaming service. And while some of those numbers are certainly tied to a promotion with Verizon (NYSE:VZ), it’s still a very big deal.
So, what now? With Disney’s latest venture off to a solid start, a recent well-received earnings beat and breakout in hand, the price for admission in Disney stock looks compelling.
DIS Stock Price Weekly Chart
Much to the disappointment of Buzz Lightyear, Disney stock is not a “to infinity and beyond” situation. Nevertheless, shares do offer a solid buying opportunity if we’re to believe the technical picture. Wednesday’s heavy volume rally is a strong show of support from investors. But there’s more, too.
Yesterday’s bullish move in DIS follows a supportive massive triangle breakout in April and this summer’s resetting of Disney’s base count after a failed flat base breakout. All told, Disney stock has put in the time and effort on the price chart which supports a continued rally in shares.
Disney Stock Strategy
The proper buy point in DIS stock according to Investor’s Business Daily’s resident technicians was $147.25 as shares raced 10 cents through a flat base. I prefer my interpretation of Wednesday’s breakout occurring out of a durable first-stage cup pattern. The prior failure this past summer, as well as depth and shape support this alternative view.
Similarly, my advice is to buy DIS stock today. I’d look to take initial profits between $180-$200. I see the last six months of base and consolidation work as a pause at the midway point of a rally which began with the triangle breakout this past spring.
Regardless of who you believe, all signs point to a continuation of Disney’s bullish trend. Still, we never know in advance if this breakout will prove to be a crowd-pleaser. With that in mind, using a 7%-8% stop-loss makes solid sense. I strongly believe we can all agree on that.
Investment accounts under Christopher Tyler’s management do not currently own positions in 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 market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.