This will be a short and simple T.A, just because it's Disney. Their ratios, products, management etc, speak for themselves and their fundamentals. I will just go through the technicals- most of the fundamental risks that aren't idiosyncratic to Disney are covered in my previous posts(Links #1&2).
Since the 2009 lows, Disney has outperformed the market by quite a margin(about 900% up to be precise). Let's get on with the technicals. There are three main structural support areas: 115(primary), 90-80(Recession Primary), 65-70(0.618 Fib). Disney is currently in a textbook example of extensions, where it hit the targets for each wave with maximum precision. As a usual momentum continuation from Wave III , Disney entered a momentum channel that's currently ongoing. Recently, Disney hit the top of the channel (2.62 EW extension), that is one of the targets for Wave V.
Supplemental Quarterly chart 14 Q's key support
Obviously, this implies a continuation, and yet I am short? To me it's quite a straightforward question, how far up can Disney go, and is the risk worth it? The answer to that question, in my opinion is that at this point of the cycle(Link #2), the risk is just not worth it. To make my point clear, this is a decision tree from TESLA ( TSLA ) that could also be applied to Disney. You can read more about it in my next post about Tesla .
Tesla Decision Tree and four major Auto Manufacturers' stock performances since Trump took office.
To wrap this post up, obviously the decision tree is very simplified and in reality it's much more complex than that(the events aren't mutually exclusive). At some point the momentum channel for Disney is going to break down. Although, this might just be a good opportunity to buy for the long term. Considering how current trends are moving and how people spend their leisure time in entertainment and gaming, without a doubt, Disney as one of the market leaders, will continue to grow in the long term.
This is it for Disney(Dis), hope that it's useful. If you found the TA interesting and aligned to your analysis, don't be so reserved- give this post a thumbs up or comment your view on Disney.
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1. FedEx( FDX ) Fundamental Analysis: tradingview.com/chart/FDX/2nIxjsnA-FedEx-MEDIUM-TERM-OUTLOOK-Technicals-Few-Fundamentals-DJUSAF-TS/
2. Fed Rates Supercycle study: tradingview.com/chart/FEDFUNDS/H2iTE7ig-RECESSION-IMPENDING-PART2-FED-RATES-SUPERCYCLE-PREMIUM-ANALYSIS/
Full Disclosure: This is just an opinion, you decide what to do with your own money.
Could be applied to most stocks. However, in a model, the probabilities have to be carefully be calibrated because, obviously none of them are mutually exclusive events.
The idea of the tree was to combine, geopolitical(trade) risks to macroeconomic(fundamental) indicators.
Bare in mind this idea is for the medium term. In the short term I see Disney potentially going up to 160$ where I would stack my shorts. Obviously at this point it's too early to be going short with a US/China deal going through.
Question is, what's the absolute potential upside for the SPX in 2020. Best scenario, a deal gets done phase 1 and even if we have 2 more rate cuts to 1%, it would be +10-15%, to ¬3500ish. Even this is a stretch. But there are not sellers either, because the downside is limited mostly by QE. Meaning, expectations should be that market will be sluggish for the next 1-1.5 years before something major occurs.
What I would like to point out is the 4.1 extension which falls to the third projection of the second waves V-Pattern Formation.
What came into my mind is the retest of the vertical multi-year moves trend-line. If we close below it there might be a bearish signal upcoming on the corresponding monthly chart, maybe a lower high or a bearish chart-pattern on or around the 50 -61 Percent zone of the ongoing yearly candle.
These are a few observations I made, hope it helps :P