Disney Stock Dips as Park Layoffs Increase

DIS is creeping into "overbought" territory

Assistant Editor
Nov 27, 2020 at 9:38 AM
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In September, Walt Disney Co (NYSE: DIS) announced plans to layoff roughly 28,000 employees, and this morning that number got a little bit bigger. According to the theme park operator, the number of layoffs has increased to 32,000, with the plan going into effect in the first half of fiscal 2021. The decision comes as the pandemic has forced the company's Disneyland theme park in California to remain closed, while its other parks are opened with capacity limits. As a result, DIS was last seen down 0.1% in pre-market trading. 

If you're looking for an explainer to today's small dip, its Disney stock's 14-day Relative Strength Index (RSI) of 67 -- on the cusp of "overbought" territory -- which indicates a short-term breather may have already been in the cards. Despite today's drop, DIS has held on to its year-to-date breakeven point and its ascending 10-day moving average. 

Now may be the primetime to consider options for DIS. The security's Schaeffer's Volatility Index (SVI) of 32% sits in the 13th percentile of its annual range. This means option traders are pricing in relatively low volatility expectations at the moment. Even better for options buyers, the equity's Schaeffer's Volatility Scorecard (SVS) ranks at 70 out of a possible 100 implies that DIS has tended to exceed volatility expectations in the past year.


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