SIAChartsā relative strength rankings analysis not only helps investors determine which stocks in a universe are outperforming or underperforming relative to their peers, it also helps to identify changes in capital flows and investor sentiment.
The Walt Disney Company (DIS) has been a relative dog for years. Until yesterday, when it finally climbed up into the Yellow Neutral Zone of the SIA S&P 100 Index Report, it had been languishing in the red zone since May of 2021. Relative strength has improved over the last month with the shares climbing up off of rock bottom rising 49 positions to 50th place.
From when DIS exited the green zone in April of 2021 to when it left the red zone yesterday, the shares fell 41.0% while the S&P 100 Index rose 20.9%.
In the last month, DIS has rallied 22.6% while the index is up 1.5%.
Candlestick Chart Rallies Out of a Falling Wedge:
This three-year chart of Walt Disney (DIS) shares highlights the strength of the recent turnaround. After spending most of the last three years under distribution, DIS broke out of a downtrend back in November and at the same time, it completed a bullish Falling Wedge pattern (circled).
For the last three months, the shares have been bouncing back, establishing support near $90.00 and then rallying up through $100.00. Currently DIS is bumping up against resistance near $110.00. A breakout from here would confirm the start of a new recovery trend. Should that occur, next potential resistance may emerge in the $125.00 to $130.00 area based on previous highs and lows.
Point and Figure Chart Starts to Rebound:
Walt Disney (DIS) shares were consistently under distribution through most of 2021 plus all of 2022 and 2023. The shares appear to have bottomed out last November. For the last three months the shares have been rebounding, building on a bullish Double Top breakout, and regaining the $100.00 level.
DIS has snapped a short-term downtrend line, but to confirm that this is the start of a new recovery trend and not just another bear market rally, they need to clear their February 2023 high and close above $113.00. Should that occur, the next potential resistance may emerge at a 45-degree downtrend line near $119.90, or previous highs/lows near $124.75 or $129.80. Initial support appears near $100.35 based on a 3-box reversal.
With a perfect bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 10 out of 10, DIS is exhibiting short-term strength across the asset classes.
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