Here’s When to Buy the Dip in Disney Stock

Disney stock is making new 52-week lows after reporting disappointing earnings. Here's where critical support is now.

Disney  (DIS) - Get Free Report stock is down about 11% so far on Wednesday as the company missed on estimates for its fourth-quarter earnings and revenue results.

A top- and bottom-line miss is never an ideal scenario, particularly in a bear market and especially for a stock trapped in a vicious downtrend.

Of course, it doesn’t help that investors are digesting the midterm election results and gearing up for tomorrow’s before-the-open release of the monthly inflation report.

That’s a lot to take in alongside disappointing earnings and ultimately has Disney investors in a “risk-off” mood and hitting the sell button. 

After missing on earnings and revenue estimates — but beating on Disney+ subscriber expectations — the takeaway appears to be that profits may be elusive in the future as well.

Worries of a global recession aren’t helping matters. That said, there is a level on the chart that I can’t seem to get out of my head.

When to Buy Disney Stock

When I look at the weekly chart above, I can’t help but notice the solid support in the low $80s.

That level has been strong support over the years, but it’s also near a few other key levels. Most notably, the covid-low comes into play near $79. That’s also near the 200-month moving average.

I’m not sure if the stock will trade this low — it would require a further decline of about 10% from current levels — but if it does, I would expect it to be decent support.

The company now has its fundamentals working against it, while the stock has the technicals working against it.

That said, this is a high-quality business and it’s one that certain long-term investors would like to own. In that scenario, the $80 area is a good area to consider.

On the upside, keep a close eye on $90 to $91.

The $90.23 level marked the low in July and was the 2022 low prior to today, while $90.71 is the October low.

If the stock can reclaim this zone, then we could have a bullish reversal on our hands. That could open the door back to the declining 10-week moving average — which is active resistance — followed by the $100 level.

Keep in mind that a further decline from current levels, followed by a rally back to the $90 to $91 area, could be met with resistance. That would be a clue to traders that the decline may not be over for Disney stock.