Walt Disney - NYSE: A technical analysis. Pt1This article is going to look at the Walt Disney Company listed on the NYSE and my outlook on their stock performance for 2023 from a purely technical analysis perspective. I will not go too technically deep but will endeavor to SHOW my prediction for 2023.
From the 1920’s Disney has transformed into a huge multinational with diverse service offerings, and has enjoyed steady growth over the years however the share price in the last few months has eroded some of this growth and 2023 in my opinion will be interesting and I will show you why.
A look at the Walt Disney chart on the weekly timeframe will show something interesting
Now from around Mar 2021, where Disney peaked to around $203, the company has been on a downward trajectory.
Inserting a trend line from Nov ’21 to Dec ’22 which touches the highs, the share price dropped from around $180 to the low $90’s. Label this line AB. Also insert a trend line CB, (Jun '22 to Dec '22) showing the low points before price action reversed up.
Our timeframe is on the weekly chart.
There is an. interesting convergence at point B. (descending trend line and ascending trend line). This price action forms a descending wedge/ cone. Chart pattern analysts will view this as a sign of a trend reversal from falling prices to rising prices. This is what has currently transpired and the price shot up above the descending trend line AB.
The price has risen to the current $111.63 (at time of writing). Does this mean that Disney is now back on the positive trajectory? Well allow me to show some interesting insights.
The current stock price increase though exciting is accompanied by average volumes (not a lot of demand for the stock). The volume has been nothing but fair and not really convincing to show more upside potential in price.
Now if you super –impose another trend line parallel to CB and labelled it DE, it will bring out a channel that might actually form the new path in which price will start moving in potentially. Now in some cases bull run prices that emerge from descending wedges do not break this parallel line, and it would be interesting if Disney does so.
The final technical analysis tool for consideration though simplistic, is the epitome of elementary technical analysis. The moving averages. They have the ability to show support and resistance points.
The 20,50,100,200 SMA on this weekly chart will help make my case for Walt Disney 2023 stock direction. Price action has broken above the 20 SMA and slightly over the 50 SMA (As of this week) however, there are some key resistance levels, that if not broken we will see further downward movement. If the price breaks the $119 level then we could probably see price go as high at $130 and then $170 and beyond.
THE VERDICT
I strongly think Disney will have another tough year on the market, from a technical perspective the stock is one that I would personally SELL in 2023. I have put up 4 scenarios, which are:
Scenario A - price might retrace to around $120 and comeback down to $80or
Scenario B - price goes up to around $143 or
Scenario C price goes up to $168 retrace down $80.
Scenario D which is unlikely might see Disney hit above $200 by Dec 2023.
This technical analysis though not exhaustive might give some interesting insights.
Verdict: - look for SELL opportunities when price action rises. we might close the year below $80.
Takunda Mudenge is a financial market analyst based in Zimbabwe, Africa. He writes in his personal capacity for educational and entertainment purposes. This should not be construed, assumed or viewed as investment advice. Please consult a professional for such.
