Trade view /
28 June 2016 at 10:32 GMT
As a reminder and for some perspective, note that on the multi-year weekly chart, DIS stock in early May bounced into the big former support line that stretched all the way back to 2011. What was support then became resistance. The May highs also formed an important lower high versus the 2015 double-top highs.
Source: Saxo Bank
On the daily chart we see that the entire rally off the February lows had the characteristic of a rising wedge that after a brief breakout fake-out move above the red and declining 200-day simple moving average then quickly gapped back below. A few days later the stock was also back below its yellow 50-day moving average, which then acted as resistance. Last Friday following the Brexit vote DIS stock snapped below horizontal support and saw follow-through selling on Monday.
The stock may see a bounce today on Tuesday but I am taking at least partial profits and may keep a small portion of the short on for possibly further weakness in coming weeks that could see the stock into the very low $90s.
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more