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Disney stock staging a comeback? Bullish signs emerge on DIS chart

Disney stock staging a comeback? Bullish signs emerge on DIS chart

In 2023, Disney (NYSE: DIS), a company known for its magical storytelling, found itself embroiled in a storm of controversy. 

Accusations of promoting liberal or progressive agendas and alleged political bias in its content have taken a toll on the entertainment giant’s stock. Moreover, an escalating dispute with Florida Governor Ron DeSantis has further added to Disney’s woes, causing significant operational challenges for the company.

Despite the recent decline in its share price this year, there are potential indications that Disney’s fortunes may soon reverse. 

Notably, a bullish pattern known as the ‘falling wedge’ may be taking form on the DIS chart, as suggested by the smart trading platform TrendSpider on July 31. 

Falling wedge pattern potentially taking form on Disney stock chart. Source: TrendSpider

A falling wedge is a bullish chart pattern characterized by converging trendlines, with the upper trendline sloping downward at a steeper angle than the lower trendline. It indicates a gradual narrowing of price movements and a potential reversal in a downtrend. 

As the price approaches the apex of the wedge, it often experiences increased buying pressure, leading to sharp price breakouts to the upside, as traders and investors perceive the opportunity for a trend reversal, resulting in potential significant price gains.

What’s next for DIS stock price?

At press time on August 1, shares of Disney were standing at $88.89, up 3.2% in the past 24 hours. 

DIS 1-day price chart. Source: Finbold

Over the past week, the company’s stock price rose by 1.6%, while losing 0.3% on a monthly basis.

Year-to-date, DIS is down less than 1% in the red.

The price action was approaching key horizontal support near $85 before staging a rebound on Monday. 

If a possible breakout from the falling wedge materializes, the price action may be on its way toward the 100- and 200-day moving average (MA) in the region of $93-96. This area is the next resistance zone for Disney bulls. 

On the downside, the $85 zone will continue to act as support.

Disney considering ESPN stake sale

Meanwhile, the company tapped Kevin Mayer and Tom Staggs, two executives who once competed to replace Bob Iger as CEO, to help it explore a potential deal to sell a stake in its ESPN sports network, Bloomberg reported on Monday.  

In particular, ESPN Chairman Jimmy Pitaro will consult with Mayer and Staggs on assessing potential partners for the business after receiving “a healthy level of interest” in the business from sports leagues as well as tech, marketing, and distribution companies.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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