Thursday, March 12, 2015

DIS Walt Disney Monthly Chart Overbot Negative Divergence Developing

The Mouse House runs from 14 to 103, +636%, since the 2009 bottom. Investors are chasing into DIS stock and parents are buying it for their kids; too bad that over the coming years as the kids grow older they will watch the stock fall. Keystone posted this chart a couple months ago before the huge spike higher. The stick save prevented the top from forming and extends the price move for a bit longer. With the higher high in price the indicators are negatively diverged except for the MACD line so after an initial spank down in the monthly time frame, price will come back up for a higher high. As soon as the MACD goes neggie d, over the next one to three months, the top is in for Walt Disney.

The hedge funds are looking for bag holders and pumping the stock daily in the media encouraging investors to "buy it for the children." Price is extended far above the moving averages and requires a mean reversion. The upside is limited here on out so if you enjoyed the rally or have any profits in DIS it would be prudent to take the money and look elsewhere for opportunities. The expectation would be for DIS to top out over the next three months; the thrust higher in February creates momo that will help continue buoyancy for a few weeks. DIS would be expected to be moving towards or at 90 in summer time. Watch the MACD line to see when it rolls over with neggie d. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 7:54 PM: DIS rallies a huge +4.2% today on news of new film releases and other happy talk printing at 107.17 new all-time record highs. Traders are throwing money at Disney stock without any concern or worry. As discussed above, the MACD line has further upside juice available and DIS will not roll over until the MACD rolls over. A print at 108 may lead to 112 but the current thinking would be that DIS tops out during April-June at 107-112 but the expectation is for a pull back perhaps to 90-102 first during March-April. NYSE floor trader Steve Grasso advises investors to buy DIS stock with both hands at these levels as he expects the good times to continue so it will be fun to watch going forward. With that big +4% pop today this would be a great place to exit for the near term. The neggie d with stochastics and money flow should create an initial spankdown in the monthly time frame in the near term say March-April. For the month of March thus far, DIS is up +3%.

Note Added Saturday, 3/14/15: On the Fox News Business Block, Gary "Chartman" Smith advises viewers to buy DIS with both hands and is calling for a +50% increase in Disney stock within two years; Smith is saying that DIS will be over 160 in 2016/2017. 

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