The hype for episode VII Star Wars Saga, “Star Wars: The Force Awakens,” is in overdrive. Disney owns Star Wars. Investors who own stock in the company know that sometimes overhype is a sell signal, while at other times it is the start of another up leg. Therefore, they are asking, “What to do now?”
Investors who do not own Disney stock are asking the same question, as many see a buying opportunity, while others see an opportunity to sell. For the answer, please read on and see the annotated chart.
Back in May, I wrote that Disney DIS, should be bought under two scenarios. The first scenario was S&P 500 decisively breaking above 2125; this scenario never occurred. The second scenario was to buy if Disney fell in the zone of 94-97. Here is the previously published chart showing the buy zone. At the time of that writing, Disney was trading at $109.93.
The second scenario came true on Aug. 24, 2015; Disney opened at $93.38 and traded as low at 90. Subscribers to The Arora Report scaled into Disney at an average price of 94-95. Then the stock moved back up to the high of 120.65 on Nov. 23. For an investor who bought the stock at 94, this high represented a return of 28% over three months, or 112% annualized. Of course, the foregoing would have mattered only if an investor took profits at the high. The Arora Report gave a call to take partial profits at $112.75 and partial position is still being held….Read more at MarketWatch
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