Before I get to other updates today, I want to start off with an update on the Disney Trade (DIS). The Walt Disney Company (DIS) has been basically underperforming the general market for several months now. Is Disney's Kingdom, and maybe more importantly its stock, still magical?
Disney's underperformance, when analyzed on this next 5 year monthly candlestick chart, shows that DIS has been building a longer base than anticipated. I originally thought a Zig-Zag wave pattern ended Disney's correction at the time and it was ready to begin its next leg upwards. But the Zig-Zag wave pattern as it turns out was just the first part of a longer correction period.
Typically, the longer the consolidation period is the longer the breakout period is. Let's re-analyze the Disney trade (DIS) from both a shorter and longer term perspective.
Disney Trade (DIS) - Revisited
This first chart is a 5 year monthly candlestick chart. Disney's share price has been forming a Symmetrical Triangle wave pattern over the last 2 year period.
Here is an illustration of a Contracting Triangle with the corrective waves (Waves A-E) labeled. Contracting Triangles are also called Symmetrical Triangles.
Most times Triangle patterns act as continuation patterns, meaning the continue the trend that was in place before the development of the Triangle pattern. But from an Elliott wave perspective, the Triangle pattern has a very specific meaning.
After a long uptrend, Triangle wave patterns….
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I review the 2 most probable price target areas for Disney's share price over the longer-term. In addition, I illustrate Disney's share price action from an Elliott Wave perspective. Elliott waves are excellent price predictors.
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