Episode VII in the Star Wars Saga, “Star Wars: The Force Awakens” has the potential to propel Disney stock by 25% over the next six months if the S&P 500 gains 6% over the same period. However, that doesn’t mean that Disney is just a straight buy here. Certain criteria must be met in order for that to happen.

It is common for movie-studio stocks to run up in anticipation of a major release. There has not been any recent movie release more anticipated than “The Force Awakens,” scheduled to be in theaters on Dec. 18, 2015. Disney DIS,  as an investment, has the added advantage of being the most diversified large media company.

Let us examine the technicals, fundamentals, and the real reason behind Disney’s parabolic run up as shown on the chart, and when to enter this position.

Please click here for an annotated chart of DIS.

Technical analysis

Based on the proprietary algorithms at The Arora Report, the target for Disney is around $140 as shown on the chart. The background colors on the chart are a quick indication of a composite of some of the proprietary Arora Report indicators: green for bullish, red for bearish, and blue for neutral. Disney is technically very overbought, but typically stocks with strong fundamentals, upcoming catalysts, and a parabolic move like Disney has exhibited, tend to get even more overbought before reaching an eventual top…Read more at MarketWatch

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