Red-Hot Disney Stock Slapped With Rare Downgrade

Disney stock hit a record high on Friday

Jun 17, 2019 at 10:18 AM
facebook twitter linkedin


The shares of Walt Disney Co (NYSE:DIS) are down 1.2% at $139.94, after the Dow stock was hit with a rare bear note. Specifically, Imperial Capital downgraded Disney to "in line" from "outperform," saying the equity is now at "record multiples" following its recent rise up the charts. The brokerage firm maintained its price target of $147 -- modest upside to last Friday's close. According to CNBC, this marks the first Disney stock downgrade since last June.

Heading into today's trading, Walt Disney stock was boasting a 29% year-to-date lead, and topped out at a record high of $142.95 on Friday. As such, the equity's 14-day Relative Strength Index (RSI) settled last week squarely at 70, indicating DIS shares were oversold -- and could be in store for a near-term pullback.

Given the stock's longer-term technical strength, it's no surprise to see sentiment tilted toward the bullish side -- both among analysts and the options crowd. Options bulls are circling today, too, with around 36,000 calls traded so far -- four times what's typically seen and four times the number of puts on the tape. Speculators may be buying to open the June 140 and 142 calls to bet on a quick bounce for DIS by front-month options expiration at the close this Friday, June 21.

Elsewhere on Wall Street, short sellers have been calling it a day, with short interest down 7.2% in the two most recent reporting periods to 17.47 million shares. This accounts for just 1.1% of the equity's float, or 1.2 times the average daily pace of trading.

 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners