First up this week is entertainment giant Disney (DIS), a firm behind characters like Mickey Mouse and divisions that include ESPN and Pixar. Disney has been showcasing tremendous relative strength in the past six months, rallying more than 21% year-to-date; the S&P has only gained 4.6% over that same period. Now, it looks like Disney is primed for bigger gains.
Disney is currently forming an ascending triangle pattern, a setup that's identified by horizontal resistance above shares at $46 and uptrending support below them. Essentially, as DIS bounces in between those two technical levels, it's getting squeezed closer and closer to a breakout above that $46 resistance level. When that happens, we've got a buy signal for this stock.Momentum, measured by 14-day relative strength index, adds some extra confirmation to this setup -- it's been locked in an uptrend itself since DIS' April swing low. That's a good sign considering that momentum is a leading indicator of price, still, I'd recommend waiting for $46 to get taken out before becoming a buyer.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV