Walt Disney Company (DIS)

There has been one trade set-up in particular that I have been waiting patiently for it to develop. That trade set up is a Golden Cross trade set-up for the Walt Disney Company (DIS). I talk about Disney’s Golden Cross trade set-up in this previous full-length article “Walt Disney (DIS) High Confidence Trade Set-Up“.

In particular, I mention that Disney’s first pullback to its 200 Day moving average after it developed its Golden Cross pattern was the best opportunity to make a scale-in purchase of shares to go long.

Let’s get a quick update on the status of this Golden Cross trade set-up for the Walt Disney Company (DIS).

DIS – Moving Averages

This chart is a 1 year daily candlestick chart to see Disney’s share price action in relationship to its moving average lines. I placed a Fibonacci Retracement Tool on Disney’s prior uptrend to calculate the 38.2%, 50% and 61.8% Retracement Lines.

Analyzing the Golden Cross Trade Set-Up Using Moving Averages & A Fibonacci Retracement Tool

The first correction in a new uptrend tends to statistically correct around the 61.8% Retracement Line. That would indicate a quick break below the 200 Day moving average. A break below the 200 Day moving average appears to be an excellent opportunity to make a scale-in purchase of DIS shares and go long the stock

Watch for some sort of bullish reversal candlestick pattern in the $100 – $103 support area. A bullish reversal candlestick pattern that develops in that support range could be an early indicator that DIS has resumed back into its uptrend.

DIS – 3 Weeks Tight Entry

This next chart is a 2 year weekly candlestick chart for the Walt Disney Company (DIS). I’ve identified the 3 Weeks Tight chart pattern that I previously wrote about in my previous article linked above.

Analyzing a Possible Scale-In Entry Point Using a 3 Weeks Tight Chart Pattern Support Area

A 3 Weeks Tight chart pattern is an area of consolidation and accumulation by a larger investing entity. A re-test of the breakout area from a 3 Weeks Tight chart pattern should find ample support on its first re-test.

Walt Disney Company (DIS) – Summary

The Walt Disney Company (DIS) Golden Cross trade set-up appears to be developing almost exactly as planned. I say almost because it took a little longer for the pullback to the 200 Day moving average than I anticipated.

Previous examples of the Golden Cross trade set-up have yielded out-performing results over the medium term (6-9 month period). I anticipate DIS to be no different. It has a new theme park in China and a movie franchise that is hot. Earnings should continue to do well in the near term to provide the necessary catalysts.

The 200 Day moving average trade is supported by a 61.8% probable retracement from a Fibonacci Retracement Tool, a MACD Histogram that is showing selling momentum that appears ready to begin reversing, and support around the $103 area from the 3 Weeks Tight chart pattern. A scale-in purchase to go long in the $100 – $103 area looks like a good opportunity for market outperformance in the 6-9 months that follow.

Good luck trading!

On deck: Starbucks