Why More Gains Could Be In Store For Walt Disney Co, Amazon.com, Inc.

Walt Disney Co (NYSE:DIS) and Amazon.com, Inc. (NASDAQ:AMZN) have both been wild successes on the charts, but more gains could be in store

Dec 17, 2015 at 11:49 AM
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Walt Disney Co (NYSE:DIS) has been enjoying "Star Wars" hype over the past few sessions, gaining over 4% week-to-date to trade at $112.53. Meanwhile, Amazon.com, Inc. (NASDAQ:AMZN) has more than doubled in 2015, hitting a record high of $684.82 earlier this month, and was last seen at $673.20. However, according to data provided by Schaeffer's Senior Quantitative Analyst Rocky White, it may not be too late to jump on these stocks' bullish bandwagons. 

For example, DIS last week pulled back to its 160-day moving average, which historically has had bullish implications. On a 21-day timeline, the shares have sported positive returns four of the last five times they've met this trendline, averaging a 5.3% gain. 

Adding to the stock's bullish case in the near term is the seemingly bearish sentiment of option traders. DIS' Schaeffer's put/call open interest ratio (SOIR) stands at 1.19, which lands in the 86th percentile of its annual range. So not only does put open interest outweigh call open interest in the outperformer's front three-month series of options, but this reading is far more put-skewed than normal at the moment. If these put players begin to hit the exits, the shares could get a lift. 

Not to mention, Walt Disney Co (NYSE:DIS) could also benefit from a round of analyst upgrades, especially if "Star Wars" can replicate its international success in the U.S. Despite the security's technical strength, 43% of covering brokerage firms consider it just a "hold."

As for AMZN, the shares bounced from their 40-day moving average late last week, which isn't too surprising. The equity has posted positive 21-day returns 86% of the time after hitting this level in the past three years, with an average gain of 5.1%. A similar surge this time around would have the stock back in all-time-high territory. 

Like DIS, AMZN could benefit from an exodus of put traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.04 outranks four-fifths of readings recorded in the past 12 months. In other words, put buying has been more popular than normal. 

Bears are certainly throwing in the towel in another area. During the most recent two-week reporting period, short interest on Amazon.com, Inc. (NASDAQ:AMZN) fell by nearly 22%. 
 

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