Buz Investors Heading Higher Walt Disney Co (NYSE:DIS) reported earnings on February 7, and the results were mixed. It managed to beat on the bottom line, but the top line fell short of expectations. The revenue miss was due to continued pressures from the ESPN network division as consumers continue to shy away from cable. The initial reaction saw Disney stock trade lower by two percent, but by the following trading day, this potential drag was completely erased, as DIS stock had no problems shrugging this news off and closing the day higher.
This ability to shrug off a poor earnings report comes as no surprise. I have been bullish on Disney stock since November 2016, after indication from the Disney stock warranted this view. This view is completely predicated on the patterns and indicators that are generated on the DIS stock chart.
The long-term bullish trend in Disney stock that began in 2009, after the conclusion of the financial crisis, is defined using an ascending channel. This channel is created by using two upward-sloping parallel trend lines, where one trend line acts as support and the other trend line acts as resistance. This channel has effectively contained the price of Disney stock.
As long as DIS stock stays within the confines of this channel, this bull market is set to continue. Support outlined by this channel was being tested late last year, but the break above the downtrend line has suggested that the path of least resistance is towards higher prices, and this puts resistance outlined by the ascending channel as the next logical price objective.
Click here for reuse options!