DIS closes below its opening price unable to hold early session gains
The Walt Disney Company (DIS) Technical Analysis Report for Oct 27, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DIS finished Tuesday at 123.31 losing $0.75 (-0.6%), but still slightly outperforming the Dow Indu. (-0.8%). Trading $0.58 higher after the open, The Walt was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DIS as at Oct 27, 2020):
Tuesday's trading range has been $1.58 (1.27%), that's far below the last trading month's daily average range of $2.61. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DIS.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
The market closed below the 100-day moving average at 123.50 for the first time since October 6th. After having been unable to move lower than 122.95 in the prior session, the share found buyers again around the same price level today at 123.03. The last time this happened on October 23rd, DIS actually lost -3.34% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 122.95 where further sell stops could get triggered. As prices are trading close to October's low at 120.61, downside momentum might speed up should Disney mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 100" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for The Walt. Out of 46 times, DIS closed higher 58.70% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after six trading days, showing a win rate of 63.04% with an average market move of 0.46%.