The company’s potential sale of ABC has been widely reported in the news.
Walt Disney Co (NYSE:DIS) has been getting a lot of attention from investors lately due to its potential sale of ABC. The company recently resolved its cable dispute with Spectrum, resulting in the return of ESPN and other channels. The topic of television streaming and its future has become a popular discussion among analysts, and Raymond James has recently added their voice to the conversation. The firm has initiated coverage on DIS with an “outperform” rating, affirming that the company’s “strong asset portfolio will help support a steady push toward streaming.”
When looking at the charts, DIS has been showing poor performance with a 21% year-over-year decline. On September 7, it reached a three-year low of $79.75. While the stock has been rebounding from those lows, the upward movement may be short-lived, as it has just encountered its 50- and 60-day moving averages, both of which are historically bearish trendlines.
Based on analysis by Schaeffer’s Senior Quantitative Analyst Rocky White, DIS has approached its 60-day moving average within one standard deviation seven times in the past three years. After each occurrence, the stock was lower one month later 86% of the time, with an average loss of 7%. Similarly, Walt Disney stock has received eight similar signals from its 50-day trendline, wherein it was lower after one month in 75% of cases, averaging a 3.9% drop.
If you’re considering investing in DIS, now might be a good time to consider buying puts. The security’s Schaeffer’s Volatility Index (SVI) currently stands at 23%, which is in the low 7th percentile of its annual range. This suggests that options traders are currently pricing in low expectations of volatility.
