The stock really took flight once it announced its new streaming platform plans. Closing on its acquisition of Fox and gaining further control of Hulu also helped cement investors' view of Disney future. In short, the future is bright and Disney is positioning itself for the next wave of entertainment consumption.
That said, some of its long-standing businesses are still carrying a big load and specifically, its studio division is doing some heavy lifting in 2019. We've already seen big showings from Avengers: Endgame, Aladdin and Captain Marvel.
Toy Story 4 was released this past weekend and the release of Lion King is less than a month away. Frozen 2 is slated for Nov. 22, while another Star Wars release is scheduled for December.
Disney has a loyal shareholder base that's willing to display patience as its streaming platforms are built out. In the meantime, its upcoming and current films should bolster Disney's financials. Can it bolster the stock price, too?
Trading Disney Stock
In April, Disney stock gapped higher from $118 to $130 after the company's investor meeting. The gap up fueled a rally to $142.37, where Disney stock temporarily topped out and pulled back.
Shares of Disney then chopped between $131 and $135 through the month of May, consolidating its big gains from the prior month. However, this consolidation is more important than just digesting its gains. It showed that Disney stock was able to hold up amid widespread selling pressure in the broader stock market. The Nasdaq quietly slipped 9.5% from April 30 to June 1, while the S&P 500 fell almost 7%. Disney stock only slid 3.3% during that time.
That showed me that investors were willing to stay long Disney, while funds were willing to accumulate the stock even after its big run and amid increased stock market volatility. That action bodes well for bulls going forward.
We've since seen DIS stock rally throughout the month of June, but the same $142.50 resistance level continues to keep the name in check. The 20-day and 50-day moving averages are trending higher, while Disney stock continues to put in a series of higher lows.
That bodes well for future upside and should Disney push through $142.50, it could trigger a notable breakout up toward $150. On the downside, a close below $135 would be somewhat concerning at this point. This mark was short-term range resistance in May and is just below the 50-day moving average. Below this mark would raise some red flags.Save 57% with our July 4th Sale. Join Jim Cramer's Action Alerts PLUS investment club to become a smarter investor! Click here to sign up!