Benzinga
Published May 24, 2022 19:29
Updated May 24, 2022 20:10
Here's How Disney Stock Is Showing Signs The Bottom May Be In
Walt Disney Co (NYSE: NYSE:DIS) was trading down more than 4% on Tuesday after a bullish day in the general markets, where the S&P 500 shot up 1.66% higher, causing the entertainment giant to close the trading day up over 3%.
Disney’s been trading in a fairly consistent long-term downtrend, which has brought the stock down more than 50% from its all-time high of $203.02 printed on March 8, 2021, to a low of $99.47 on May 12. On May 23 and Tuesday, Disney bounced up off the $100 mark, which may have created a bullish double bottom pattern on the daily chart.
A double bottom pattern is a reversal indicator that shows a stock has dropped to a key support level, rebounded, back tested the level as support and is likely to rebound again. It is possible the stock may retest the level as support again creating a triple bottom or even quadruple bottom pattern.
The formation is always identified after a security has dropped in price and is at the bottom of a downtrend whereas a bearish double top pattern is always found in an uptrend. A spike in volume confirms the double bottom pattern was recognized and subsequent increasing volume may indicate the stock will reverse into an uptrend.
The Disney Chart: On May 20, when Disney first tested the $100 area as support, the stock negated its current downtrend by forming a higher low above the May 12 low-of-day price. Although the stock hasn’t reversed course into an uptrend yet, if the double bottom pattern is recognized, Disney may rise up to print a higher high above $106.03, which would confirm a new uptrend.
See Also: Can A Lost Apple (NASDAQ:AAPL) Watch Leads To Credit Card Fraud?
Photo: DANIEL CONSTANTE via Shutterstock
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