After gapping lower on subscriber growth, Disney (DIS) is technically oversold on RSI, MACD, and Williams’ %R. The last few times DIS became this oversold, it bounced back significantly.
In March 2020, for example, it would run from $80 to about $120. In October 2020, it would bounce from a low of $127 to $179. In May, it bounced from $169 to $186. Nowadays, we’d like to see DIS refill its bearish gap around $172 from a current price of $154.
Wells Fargo analyst Steven Cahall seems to like DIS here, too, maintaining an overweight rating with a price target of $196. Plus, according to Barron’s, “He said an analysis of subscriber growth within existing markets suggests that a drop in content additions to the service matched up with the slowing pace of subscriber growth. That supports his view that Disney+ subscriber growth will speed up as the company’s content machine—which was hampered by pandemic shutdowns—revs up in the coming years.”
Again, we’d like to see a near-term bearish gap refill around $172.