Walt Disney Stock Flashing Bear Signal Amid Streaming Buzz

The stock hit a three-year low earlier this month

Deputy Editor
Sep 18, 2023 at 2:20 PM
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Walt Disney Co (NYSE:DIS) has attracted plenty of investor attention lately, amid the entertainment giant's potential sale of ABC. The company also recently settled its cable dispute, returning ESPN and other channels to Spectrum. Television streaming -- and the future of it -- is a hot topic amongst analysts right now, and Raymond James joined the discourse today. The firm initiated coverage on DIS with an "outperform" rating, saying the company's "strong asset portfolio will help support a steady push toward streaming." 

On the charts, DIS has been underperforming with a 21% year-over-year deficit, and just hit a Sept. 7 three-year low of $79.75. Though the Dow member has been rising from those lows, the bounce may be short-lived, as it's just come into contact with its 50- and 60-day moving averages, two historically bearish trendlines.

According to Schaeffer's Senior Quantitative Analyst Rocky White, DIS came within one standard deviation of its 60-day moving average seven times in the past three years, after which the stock was lower one month later 86% of time, averaging a 7% loss. Walt Disney stock's 50-day trendline has seen eight similar signals, and was lower after the ensuing month 75% of the time to average a 3.9% drop.  

When speculating on DIS, now looks like a good time to weigh in with puts. The security's Schaeffer's Volatility Index (SVI) of 23% ranks in the low 7th percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment. 

DIS Sep18

 

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