Seemingly everyone in the trading community has been watching Disney stock, and for good reason. After a quick pullback in March, shares were trading well as the House of Mouse geared up for its Investor Day presentation on Thursday.
Closing higher by 11.5% on Friday to new record highs and it's safe to say the presentation was well received. Among other things, Disney unveiled when it would rollout its Disney+ streaming platform and its pricing ($6.99 per month or $69.99 a year). It's no surprise to see Netflix down on the day (its subscription price is almost double that), falling about 3%, but keep in mind this stock reports earnings next week.
The more important question for investors comes back to Disney stock, which has been painstakingly range-bound for years now. That's why so many traders were watching the stock this month, with the belief that it was finally going to break out. Let's look to see what to do now.
Above is a five-year weekly chart for Disney stock. Downtrend resistance (purple line) kept a lid on Disney shares for roughly three years, as the 200-week moving average and uptrend support (blue line) continued to buoy the name higher.
In July 2018, Disney stock finally pushed through this downtrend resistance and flirted with a larger breakout over $116. It proved to be too much for the entertainment giant, but on the plus side, it was holding up over the backside of prior downtrend resistance (purple line). There were a few instances where this level gave way -- most notably in Q4 2018 -- but for the most part, this level was holding up.
With Friday's reaction, Disney stock is exploding over all prior levels of resistance, giving bulls and long-term holders a huge reward for their patience.
So far, the stock is setting up exactly how we wanted, but what do investors do now if they missed the boat? Disney stock clearly has bullish momentum back in its favor. Those who weren't long on Friday but want to get in will have to chase now. If they can get a pullback, a dip into the $122.50 to $125 area could be a solid buy, provided investors are willing to hold the name for a while and continue being patient.