Hello Bruce,
Here's a little chart to go along with your comments this morning relative to DIS. There was a typing error in your analysis as the Bullish Resistance Line is at 37.
You also mentioned price objective but didn't get a chance to include it. You and I both use Chartcraft's system of using the first column of the bottom, rather than the breakout column for figuring the bullish price objective. In this case there are currently 9 X's in the first column of the bottom. Since there is no reversal down yet this will be what Chartcraft calls an "Incomplete" count until such time as a reversal occurs. Vertical price objective is calculated by taking the count times reversal requirements times box size plus lowest O: ((9*3)*1)+ 23 = Incomplete Bullish Price Objective of 50. Bruce's analysis below.
45
44
43 *
42 X *
41 X O *
40 X O X *
39 X O X O *
38 X O X O *
37 X O X O * + < Bullish Resistance Line
36 X O X O *
35 O O + * < Bearish Resistance Line
34 O +
33 O + X
31 O X * X ?
30 O X O * X ?
29 O X O * X ?
28 O X O X ?
27 O X O X X * < High Pole would occur here
26 O O X O X * < Short Term Down Trend Line
25 O X O X
24 O O X
23 O
22
21
20
JXM and Judy,
Your read of DIS was right on the money and I always enjoy your p&f analysis. I wanted to add my two cents with regard to trendlines, a vertical count po, and a suggestion of a potential Bearish Signal Reversal that is shaping up in a modified fashion. By the way, my family went to see "A Bug's Life" this Saturday and we loved it. While I would call "Toy Story", the first Pixar/Disney collaboration a **** classic, "Bug's Life" is a *** 1/2 family classic and a movie that has a ton of heart. This movie is going to have legs and is going to make a ton of money.
The Bearish Resistance Line (BRL) for DIS is at $35. A Bullish Resistance Line (brl) is at $36. A classic Bearish Signal Reversed pattern requires 7 columns to complete and breaks the previous tops in the final column. At $29 for the first move in November, DIS had a 5 column Bearish Signal Reversed modified pattern. DIS broke the Short Term Downtrend Line (STDL) and the stock made a good move to $33. This provides another example of how revised trendlines can get you into a stock sooner and can indicate a trend change earlier than a break of the conventional trendlines.
A broken brl at $31 looks like it can provide good support and I like the way Disney's chart is shaping up. The BRL has been in charge of the chart since the July, $40 top, and the BRL needs to be broken to establish a new uptrend. A buyer between $28 - $31, a range where I believe it's OK to begin or add to an existing position, would buy on the belief that the BRL is going to be taken out and a new uptrend is going to resume. AS Jori pointed out, the fundamental news from their movie division is quite bullish and could add to DIS' bottom line in a meaningful way. A High Pole would occur on a reversal to $27, and would call into question the recent bullish chart action. The more patient approach would be to wait until the BRL break to take a position in the stock.
Judy, I'd be most interested in your approach to DIS from a longer term perspective.
Take care,
Bruce |
