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XM ResearchBearish

Technical Analysis - Disney stock gets shellacked ahead of earnings

- Marios Hadjikyriacos

Disney shares fell without a parachute over the past month, hitting lows last seen in May 2020. The stock is in a clear downtrend, recording a string of consecutive lower lows and lower highs below its moving averages, while also trading within a down-sloping channel this entire year. 

Momentum oscillators paint an equally grim picture. The RSI is already below its 30 level and sinking, while the MACD remains trapped below its red trigger line. 

Another push lower by the bears could encounter fresh support around the psychological 100 region. In the case that this barrier fails too, the next obstacle to the downside may be the 92.0 level, marked by the lows of April 2020. Falling even lower, all eyes would turn to the March 2020 lows around 79.0. 

In the scenario that buyers resurface, their first target might be the recent high near 116.0. If this zone is violated, that could open the door for a test of the 129.0 area, which acted as support in March and may now provide resistance. The 50-day moving average is just above, currently at 130.5. 

In summary, Disney shares are in sharp downtrend. The company will release its latest earnings report after Wall Street’s closing bell on Wednesday, May 11 - the results will likely determine the next move in the market. 

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