The Walt Disney Company (DIS) missed the earnings per share (EPS) estimates when it reported results after the close on May 5. Its share price has fallen slightly, but have rebounded. Disney stock is now from its weekly value level at $100.24, and its monthly risky level at $112.81.
Disney is a media giant and an important component of the Dow Jones Industrial average. The stock is not cheap, as its P/E multiple is 23.69 with a dividend yield of just 1.63%, according to the trends.
The stock closed last week at $138.97, down 3.7% for the year-to-date, but Disney is in the bull market territory, or 29.5 per cent above its low of $107.32 posted on March 25, 2019. The stock is 9.4% below its intraday high of $153.41 game on Nov. 26.
The daily chart for Disney
Disney was at the top of a gold cross, a year ago. This positive picture for investors to buy the stock at its 200-day simple moving average at $128.75 on Oct. 31. This follow-up of the stock to its intraday high of $153.41 game on Nov. 26.
The gold cross is finished on Feb. 24, when the stock gapped below the 200-day simple moving average. The semi-pivot at $130.29 has transferred to the drop on Feb. 25.
On March 9, a death of the cross formed. This sell signal is produced when the 50-day simple moving average fell below the 200-day simple moving average to indicate that the price decrease will follow. This cascade of the stock up to its March 18 low of $79.07.
On the rebound, the stock traded as high as $112.70 on the 29th of April, before disappearing once again. The weakness of the last week held its weekly value level at $100.24. The upside of Friday was shy of Disney monthly risky level at $112.81.
The weekly chart for Disney
The weekly chart for Disney is positive, with above its five-week modified moving average of $107.53. The stock is below its 200-week simple moving average, or the return to the average, to $113.44. Disney has been below this key average since the week of March 13. The 12 x 3 x 3 weekly slow stochastic reading is increased to 39.30 last week, an increase of 35.05 8 May.
Trading strategy: Buy Disney stock on the weakness of its weekly value level at $100.24. Reduce the holdings of the strength to a monthly risky level at $112.81.
How to use my value levels and risky levels: The closing price on Dec. 31, 2019, were inputs to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, and new quarterly levels occur at the end of each quarter. Half-yearly levels are updated in the middle of the year, while the levels remain in play throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
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Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.