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How to Trade Walt Disney Stock Before and After Q3 Earnings

Walt Disney Company DIS will release its financial results for the third quarter after the market close on Wednesday. The stock was trading about 3.5% higher at the start of the event.

When the entertainment giant released its second-quarter results on May 11, the stock gapped slightly the following day, hitting a low of $99.47 before bouncing higher to close almost unchanged.

For the second quarter, Disney reported earnings per share of $1.08 on revenue of $19.3 billion. The company topped the EPS estimate of $1.07 and reported revenue of $18.9 billion.

For the third quarter, analysts are estimating that Disney will post earnings per share of $1 on revenue of $20.49 billion. Retailers and investors will be watching closely to see if Disney has been able to continue growing Disney+ subscribers Netflix, Inc NFLX Reporting a loss of subscribers for the same quarter.

On July 26, Truist Securities analyst Matthew Thornton maintained a buy rating on Disney and lowered its price target to $125 from $135. The new price target suggests a 13% to 22% upside potential for Disney.

From a technical analysis perspective, Disney stock is likely to trade higher in the coming days as the stock has settled into a strong uptrend pattern on the daily chart. It should be noted that holding stocks or options over a profit squeeze is akin to gambling, as stocks can be bullish on a profit miss and bearish on a profit decline.

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The Disney Chart: Disney reversed into an uptrend on July 14th and has since maintained a consistent series of higher highs and higher lows. The recent higher low was formed at $105.37 on Aug 5 and the latest confirmed higher high was printed at $111.23 on Monday.

  • On Wednesday, Disney surged above the recent higher high, confirming that the uptrend is still intact. As the stock surges higher in response to its earnings push, traders can watch as Disney prints a bearish reversal candle to indicate that the stock has topped out and another higher low is on the horizon.
  • If Disney suffers a bearish reaction to its earnings push, bullish traders should want to see the stock forming a bullish reversal candlestick above the recent higher low. Bullish traders can also watch for Disney bouncing off the 8-day exponential moving average for a retracement that has acted as strong support since July 15th.
  • Disney has resistance above $115.76 and $120.61 and support below $108.50 and $100.90.

Also Read: Disney Leads Media Earnings This Week As Earnings Season Passes Peak

Photo via Shutterstock.

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