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A Look At Walt Disney Co.

03/01/13 02:58:55 PM
by Koos van der Merwe

We are always on the lookout for a share that shows promise.

Security:   DIS
Position:   Sell

Upcoming Events and Presentations:
The Walt Disney Company's 2013 Annual Meeting of Shareholders will be presented via live audio Webcast on Wednesday, March 6, 2013 at 9.00 a.m. PST / 12:00 p.m.EST
The Webcast will be streamed via Flash and Windows media Player....
With this announcement due, do you anticipate an excellent report or do you wait for an announcement and only then decide whether to buy or not? What do the charts tell us?

Figure 1 Weekly Chart
Graphic provided by: AdvancedGET.
My first chart in Figure 1 is an Elliott Wave count of a weekly chart of Walt Disney Co. (DIS). The chart shows that a major C Wave bottomed in August 2002 at $13.39. The price then rose in a Wave I and fell in a Wave II to $15.31 by March 2009. From this low, the share price has risen in a Wave 1 and corrected in a Wave 2 of Wave III. It is now in the process of tracing a wave 3 of Wave 3 of Wave III. Elliott wave analysis suggests that a wave 3 is the strongest bull market wave there is. A wave 3 of Wave 3 of Wave III is therefore a major bull trend. Of course the odd correction will occur, but that correction offers a buying opportunity. Those buyers who bought at $15.31 in March 2009 are presently smiling all the way to the bank.

Figure 2 Daily Chart
Graphic provided by: AdvancedGET.
The chart in Figure 2 is a daily chart, suggesting that a wave 2 of Wave 3 of Wave III is in force. A wave two retracement can be 100% of the rise of a wave one, so we use the RSI indicator to trigger a buy signal. The RSI indicator has given a sell signal and is trending down. Do note that the price tested the JM Internal Band indicator (blue channel lines on charts), but did not suggest a sell. The JM Internal band is a 15-period simple moving average offset by 2% positive and 2% negative. A move above the upper band suggests a buy signal and a move below the lower band suggests a sell signal.

Figure 3 Daily Chart
Graphic provided by: AdvancedGET.
Figure 3 is also the daily chart but enlarged. Note that the price did not penetrate the lower band of the JM internal band indicator. Note also that as the price rose over the last three days, volume fell. Falling volume on a rising trend suggests weakness. When the price breaks below the lower JM internal Band you can take a short position.

I would not be a buyer of DIS at the moment. I would wait for the RSI indicator to signal a buy signal, or for the price to break below the lower JM internal band and then break above the upper band.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address:

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