DIS still stuck within tight trading range
The Walt Disney Company (DIS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
DIS ended the week 8.23% higher at 118.02 after edging higher $0.19 (0.16%) today on low volume, slightly outperforming the Dow Indu. (-0.04%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.67 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 14th, DIS gained 2.96% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DIS as at May 22, 2020):
Friday's trading range has been $1.74 (1.48%), that's far below the last trading month's daily average range of $3.99. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DIS. Prices continued to consolidate within a tight trading range between 113.42 and 120.87 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical resistance level at 119.78 (R1). The share found buyers again today around 116.83 for the third trading day in a row after having found demand at 116.50 in the prior session and at 116.04 two days ago.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 120.87 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 113.42 where further sell stops could get activated. Trading close to March's high at 121.78 we might see further upside momentum if potential buy stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for The Walt. Out of 710 times, DIS closed higher 55.07% 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 59.15% with an average market move of 0.72%.