Technical Analysis – Disney’s stock gaps back above 100-day SMA after consolidation

Anthony Charalambous, XM Investment Research Desk

Disney stock’s two-month descent, from the all-time-high of 153.33 stalled at 135.74, which is the 38.2% Fibonacci retracement of the up leg from 107.28 to 153.33. Presently, the stock appears undecided as it has gapped back above the flattened 200- and 100-day simple moving averages (SMAs), which back this notion.

The MACD in the negative area, though below its red trigger line, is strengthening, while the RSI is improving in bearish territory. The Stochastics are bullish and rising after having departed from the oversold region. That said, it’s worth mentioning the conflicting downward sloping 20- and 40-day SMAs, which argue for more declines.

To the downside, initial support comes from the 100- and 200-day SMAs at 139.60 and 138.60 respectively. The price may then test the 38.2% Fibo of 135.74 and the 133.62 inside swing obstacle underneath, from November 2019. Next, sellers would need to overcome the supportive trendline drawn from 26 December 2018, prior to challenging the 50.0% Fibo of 130.29. Diving below 130.29, the 127.48 trough from October 2019 could deny further loss of ground.

Otherwise, pushing higher, buyers might initially encounter the 23.6% Fibo of 142.46 coupled with the 20-day SMA, which could prevent the share from reaching the 40-day SMA at 144.40 and nearby high of 146.62. Further efforts could stretch towards the 149.13 resistance and all-time-high of 153.33.

Summarizing, in the very short-term, the bias looks to be neutral and a close either above 142.46 or below 135.74 could indicate the forthcoming direction.