Disney Drops Powerhouse Status Amid Pandemic

DIS is seeing resistance from its 1,000-day moving average

May 13, 2020 at 3:29 PM
facebook twitter linkedin

Entertainment and theme park mogul Walt Disney Co (NYSE:DIS) has stepped back from its normal "powerhouse" status amid the coronavirus pandemic, forced to close all theme parks across the globe and halt production on films and television series. This drop-off has triggered the security to fall back below its $200 billion market cap and break below its 1,000-day moving average. DIS hit a five-year low of $79.07 on March 18 and has now shed 24% year-to-date, making it an ideal time to bet on the stock’s next leg lower.



There is plenty of analyst optimism still circling, with 10 of 18 covering firms sporting a "buy" or better recommendation. If this heightened optimism were to unwind, it could mean an even larger setback for Walt Disney stock in the near future.

After reporting less-than-stellar earnings last week, Disney’s implied volatility (IV) continues to fall. IV’s are now priced in the 20th percentile of annual range, or stated another way, IV’s on DIS have been higher 80% of the time over the past year. Lastly, our recommended put has a leverage ratio of negative 6.6 and will double on a 12.9% drop in the underlying stock.

 Subscribers to Schaeffer's Weekend Trader options recommendation service received this DIS commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners