Shares of Disney rose sharply in early trading on Friday, continuing the upward momentum that began after the company surpassed Wall Street’s expectations for its quarterly earnings and offered a promising long-term outlook. The stock is breaking out of a pennant pattern, with increased buying interest bolstered by strong quarterly results.
Investors are advised to keep an eye on critical chart levels, which include potential resistance points at $123, $137, and $153, as well as a significant support area near $85. Following a 6% gain on Thursday, Disney shares saw a further 3% increase, reaching approximately $112. Overall, the stock has climbed 21% so far this year, trailing the S&P 500’s 25% increase during the same timeframe.
The recent surge in Disney’s shares comes alongside its announcement of a $3 billion stock buyback plan, as well as projections for high single-digit adjusted earnings per share (EPS) growth in fiscal 2025 and double-digit growth in the subsequent years. This growth will be largely supported by the success of Disney’s streaming business, which reported a $321 million operating profit in the recent quarter.
The breakout in Disney’s stock was reinforced by above-average trading volume, suggesting heightened interest from institutional investors and asset managers. Additionally, the relative strength index (RSI) reading above 60 points to bullish momentum, indicating there may still be room for the stock to rise further.
Investors should closely monitor how Disney responds to key price levels. A successful move above the $123 mark, which aligns with the 200-day moving average, could trigger further gains, potentially reaching $137 and $153. Conversely, if the stock hits a decline, the $85 level emerges as a critical support area, seen as a strong buying point based on previous trading patterns.
In summary, Disney’s strong quarterly performance, plans for stock buybacks, and a robust long-term growth outlook have contributed to its rising stock price, highlighting investor confidence in the company’s future. As Disney navigates these price levels, it remains a closely watched entity in the investment landscape.