Stocks are set for a disappointing start to the week. As of early afternoon Monday, all of the major market indices are down more than 1.5% in a third straight day of selling.

But while the market is showing some sluggishness here, some stocks are actually forming some attractive price setups in the final stretch of 2018. That's what's happening here with shares of entertainment giant Walt Disney Co. (DIS) .

In an environment where safety trades have been hard to find, Disney is looking defensive on downside days while setting up a potential breakout move in the longer term.

To figure out how to trade it, we're turning to the charts for a closer look:

At a glance, Disney's over-arching trend since finding a price floor back in April has been hard to miss - this big entertainment stock has been bouncing its way higher in a well-defined uptrend, essentially skirting all of the deep October correction that harangued the rest of the broad market.

More specifically, shares of Disney have spent this fall consolidating in a tightening range to form an ascending triangle pattern, a bullish continuation setup that points to more upside ahead. The breakout comes on a move through $120.

Why all of that significance at that $120 level? It all comes down to buyers and sellers. Price patterns, like this ascending triangle pattern in DIS, are a good quick way to identify what's going on in the price action, but they're not the actual reason a stock is tradeable. Instead, the "why" comes down to basic supply and demand for Disney's stock.

The $120 resistance level is a price where there has been an excess of supply of shares since October; in other words, it's a spot where sellers have previously been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above $120 so significant - the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Relative strength continues to be the most important side-indicator to keep in your arsenal in the context of the current market environment. In Disney's case, relative strength continues to make higher lows, signaling that this stock is still systematically outperforming the rest of the broad market.

If Disney can crack $120, we've got a brand new signal that buyers are in control of shares and it's time to join them.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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