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Disney Has More Streaming Subs Than Netflix. Buy the Mouse House?

Disney now has more streaming subscribers than Netflix, but does that make it a buy?

Disney  (DIS)  shares are popping about 6% on the day but fading from session highs. At one point the shares were up almost 10%.

The action comes after Disney stock rallied 4% on Wednesday and after the entertainment giant reported better-than-expected earnings.

Revenue climbed about 26% year over year, while earnings jumped roughly 36%. Both metrics topped analysts’ expectations.

But the earnings results aren't dominating the headlines. Instead, it’s the company’s total streaming subscribers, which hit 221.1 million. That’s more than Netflix  (NFLX) and its 220.67 subscribers.

Further, Disney’s subscriber count climbed by 14.4 million, a blowout vs. Netflix which lost about 1 million subscribers.

It was a similar situation last quarter when Disney added over 7 million subs and Netflix lost more than 200,000. Coupled with Disney’s theme parks, studio and other revenue streams, investors are taking notice.

Trading Disney Stock

Daily chart of Disney stock.

Daily chart of Disney stock.

Disney shares bottomed at $90, quickly reclaimed $100 and found this level as support. Aside from the $100 support mark, Disney stock also had the 10-day and 50-day moving averages to lean on.

From there, ahead of the earnings, the shares traded up toward the $112 area, which was roughly the June high as well. Bears hoped it was the perfect place for a double top to form following a negative earnings reaction.

Instead, we’re seeing a bullish reaction, with the shares gapping above $120. Although it has since faded, Disney stock is starting to look better. That doesn’t mean it's an easy path from here, though.

On the upside, I want to see whether  Disney can stay above $120. If so, $125 is in play. That’s where we find the 10-month moving average and the 50% retracement of the 2022 range.

Above that opens the door to the 200-day moving average and the 61.8% retracement, as well as a key prior support area at $130.

On the downside, Disney stock is at risk of filling the gap down at $112.67. Remember, this was the June high and now could act as an area of support should the shares continue to move lower.

Keep an eye on this level — the $112 to $113 zone — particularly if a moving average comes into play when it’s put to the test.

Below the 10-day and 21-day moving averages and the $112 level could put $100 and the 50-day back in play.