Disney Time For A Pullback — Follow-Up Post

By | January 31, 2018

Last week we noted:

At the beginning of the year it looked like Disney (DIS) shares were advancing towards a retest of their 2017 high, but now it looks like they will come up about a buck short.

Disney’s shares had pulled back to the $110 level where they saw some consolidation. During this time the momentum indicators began moving lower in bearish divergence to the stock price. Today the $110-level was breached in early going in the session.

Here’s an update on the technical conditions. The daily moving average convergence/divergence indicator, which is overlaid with a weekly histogram of oscillator on this chart, is moving lower on both time frames. This reflects loss in in price momentum and short term trend direction.

Stochastics has made a series of quick lower highs and lower lows and now is below its center line. The accumulation/distribution line moved below its 21 period signal average in December and has continued to track below it and lower.

Last week’s post suggested:

The price action and the technical indications imply a pullback, likely triggered by a break below the $110 support level. How deep a decline is speculation but the Fibonacci retracement levels do provide some context.
A move down to the 50% level in the $104.50 area would coincide with a reversion to the 200 day moving average.

The $110 level has been broken in trading today, but it is still early in the session. Place disciplined stops if you’re short and we’ll see how this breakdown plays out.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.