Disney Stock took another hit on Tuesday, May 5th as it announced how badly it’s been impacted by the Coronavirus lockdown. The hit obviously comes from Disney’s theme parks division, and the hit started from back when its international operations like the one in Shanghai closed, which is way before the US Disneyland and Walt Disney World in the US closed down. Now the question is: is Disney still an attractive stock? Should we buy more and hold the long-term? If so, what’s the best price to buy the Disney stock? How low can it go?
I’m going to conduct my Invest Diva diamond analysis or the IDDA for potential investment strategies for the Disney stock.
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Disney Stock Price Analysis – Fundamentals
Out of all Disney’s divisions, ESPN remains the crown jewel of Disney’s media networks segment, which now includes the recently acquired Fox cable entertainment channels like FX. Disney’s other components rely on the world-class Disney brand, sought after by children and trusted by parents. When focusing on the Disney Theme park recovery, ask yourself this question: Will you ever go back to Disney World with your children? Will you go back if they reopen? If your answer is no, then there’s a chance that many other parents are on the same boat as you.
But keep in mind, that especially in the US and ESPECIALLY in Florida, we have people who are not taking COVID seriously, and will jump on Disney lines in a heartbeat when reopened.
Disney’s price action has been mixed during COVID because of how its different divisions reacted to the lockdown; Theme parks are closed, but streaming is booming. Rumor has it, Disney will reopen in Florida on June 1st. This rumor might actually already be priced into the Disney stock.
One last thing on the fundamentals is the fact that they have cut their dividend payments.
For these reasons, I have demoted DIS stock from medium risk to a high-risk asset the Invest Diva’s premium investing group (PIG).
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Disney Stock Technical Analysis – Daily Chart
Unlike the Dow Jones and many other stocks that took a hit during COVID-19, Disney stock’s recovery has been much slower. The majority of other stocks have already broken above the Ichimoku cloud. However, Disney’s gains were capped inside the Ichimoku Cloud on the daily chart.
Check out my book Ichimoku Secrets.
With this, Disney’s recovery could take a while. We could see drops towards key Fibonacci retracement levels at 99, 82, and perhaps even 67 before seeing gains.
Check out my full analysis in this video and tell me whether you’d consider adding Disney stock to your investment portfolio.
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