Disney Shows Bullish Strength Despite Neo-Nazi Protests From DeSantis Supporters: Bull, Bear Case

Walt Disney Co DIS was popping up about 0.8% in the premarket Tuesday following softer-than-expected consumer price index data, which gave investors hope the Federal Reserve will apply a pause when it issues its decision on interest rates Wednesday.

Despite having to battle Florida governor Ron DeSantis for over a year — and after his supporters protested Disney World’s Gay Days celebration over the weekend with neo-Nazi flags — the stock has been staging a rebound.

In the trading days following Disney’s May second-quarter earnings print on May 10, the stock fell 14% to reach a May 30 low of $87.01. Since then, Disney has rebounded about 7% and on Monday, the stock appeared to be breaking up from a bull flag pattern.

The bull flag pattern is created with a sharp rise higher forming the pole, which is then followed by a consolidation pattern that brings the stock lower between a channel with parallel lines or into a tightening triangle pattern.

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The Disney Chart: Disney’s bull flag was printed between May 30 and Friday, with the upwards sloping pole formed over the first six trading days of that timeframe and the flag formed between June 7 and June 9. On Monday, Disney broke up from the bull flag pattern and on Tuesday, the stock looked to be receiving bullish continuation.

• The measured move of the bull flag suggests Disney could rise toward the $98 mark, which would put the stock into the gap that was left behind on May 11. If Disney is able to move up into the gap, the stock may find resistance at the upper level of the empty trading range.
• If Disney can remain trading above $93, the eight-day exponential moving average (EMA) is set to cross above the 21-day EMA, which will give bullish traders more confidence going forward. Bearish traders want to see big bearish volume come in and knock Disney down under the eight-day EMA, which could accelerate a move to the downside.
• Disney has resistance above at $100.90 and $108.50 and support below at $92.71 and $87.01.