Disney Stock: Here's When to Buy the Dip Off the Earnings Report

Posted by jbrumley on May 11, 2023 11:39 PM

-- Disney stock is getting hit after the earnings report. Here's where the stock finds support. --

By Bret Kenwell, TheStreet.com

Disney (DIS) stock is getting hammered on Thursday, down nearly 9% at last glance and trending near session lows.

The decline sent the shares to multimonth lows as investors were underwhelmed by the entertainment giant's earnings report.

Disney reported in-line earnings results, a slump of almost 14% vs. the year-earlier quarter. Revenue, up 7.5%, topped analysts' expectations.

Investors were also disappointed with Disney's streaming-services results, which lost 4 million subscribers in the quarter. This even as it still boasts more than 157 million paid subscribers.

Put another way, the company remains a work in progress.

Disney stock is now tumbling and investors are wondering where support could come into play. Let's have a look at the chart.

Trading Disney Stock on Earnings

Daily chart of Disney stock

Chart courtesy of TrendSpider.com

With the decline on Thursday, Disney stock is knifing through the April low near $96.50 and is below uptrend support (blue line).

It also means it failed to break out over the $102 area, which looked quite promising just earlier this week.

While Disney is a great long-term business with a promising future, one can see why the shares are struggling -- especially if investors think a recession is on the horizon.

With the shares now breaking to the downside, investors have to ask where support might come into play.

Keep an eye on the $90 to $91 area. This level was solid support in mid-March, and if the stock declines to this zone, it may be worth a closer look.

If this level holds, a bounce into the $96s could follow. Above that and the gap-fill level is at $100.

Otherwise, a break of $90 puts one of the downside gaps in play, near $87. That's followed by the 52-week low near $84 and finally, the $79 to $80 zone, which contains a big support level and the 2020 low.

If Disney stock gets to this level, long-term investors may consider accumulating a position.

From TheStreet.com