DIS falls to lowest close since November 12, 2019
The Walt Disney Company (DIS) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DIS finished the week -2.94% lower at 140.08 after tanking $2.12 (-1.49%) today on high volume, underperforming the Dow Indu. (-0.58%). This is the biggest single-day loss in over a month. Today's close at 140.08 marks the lowest recorded closing price since November 12, 2019. Closing below Thursday's low at 140.65, the market confirmed its breakout through the previous session low after trading up to $1.45 below it intraday.
Daily Candlestick Chart (DIS as at Jan 24, 2020):
Friday's trading range has been $3.05 (2.16%), that's far above the last trading month's daily average range of $1.87. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DIS.
After trading as low as 139.20 during the day, Disney found support at the 100-day moving average at 139.49. The last time this happened on August 30, 2019, DIS actually lost -0.69% on the following trading day. Prices broke below the key technical support level at 140.25 (now R1), which is likely to act as resistance going forward.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 144.67.
Although The Walt is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for The Walt. Out of 119 times, DIS closed higher 61.34% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 61.34% with an average market move of 1.48%.