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How to Trade Disney as Shares Break to All-Time Highs

Disney is hitting all-time highs as investors digest the company's outlook on streaming video.

It’s not a great day in the stock market, but it is a great day for Walt Disney  (DIS) - Get Walt Disney Company Report investors as the stock powers to all-time highs.

Even amid a pandemic, the stock is finding ways to reward its shareholders.

Shares are ripping higher by 14% on Friday. The rally comes after the company held its investor day on Thursday and talked up momentum at Disney+.

The platform now has almost 87 million subscribers, which has “exceeded our wildest expectations,” according to CEO Bob Chapek.

Disney also has momentum with its Hulu and ESPN+ streaming platforms, which have subscribers of roughly 39 million and 11 million, respectively.

Combined, the platforms have about 137 million subscribers. However, it’s the long-term outlook that has investors excited. Management said it expects to have a combined subscriber count of 350 million in four years.

That is some serious growth and explains why shares are hitting new highs despite the problems caused by the pandemic.

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Trading Disney

Weekly chart of Disney stock.

Weekly chart of Disney stock.

Just look at the way Disney is erupting on the weekly chart, clearing the all-time high from last December with ease.

The stock actually hit new highs last week, but this week’s action really solidifies the move.

It was quite telling the way Disney broke out over the $138 area in November. Not only did that fully fill the gap from February, but it took out resistance from this summer.

After building on that breakout for four straight weeks, we have Friday’s liftoff. I would love to now see shares hold the 123.6% extension just below $170. That is until some of its short-term moving averages — like the 10-day — can catch up to it and act as support.

On the upside, let’s see if Disney can power up through $180.55, the 138.2% extension. If so, that opens the door to the 161.8% extension near $198, as well as the $200 mark.

After such a big move, it’s hard to get super bullish right now. Let’s see how Disney settles in over the next few days and if it gives bulls a chance to buy.