Disney DIS Slides to New Highs on Divergences March 20
Disney (DIS) continues to be a “strong stock getting stronger” which is evidenced by today’s creep-up to a new 52-week high.
Let’s chart the creeping uptrend that took us back to the new swing high of $113 per share.
When “strong stocks get stronger” like Disney, they often leave a trail of negative divergences to the highs.
That’s what’s happening now.
Our first principle of price behavior states that “Trends, once established, have greater odds of continuing than of reversing.”
We use specific stock scans to find strong-trending candidates like these.
However, you’ll note another principle that the strongest moves – and thus the most efficient (higher probable) opportunities come at the beginning of the birth of a new trend.
At a new trend, we often see the strongest momentum and volume readings, and thus we want to focus our efforts on buying pullbacks (note blue ‘flag’ lines) as the uptrend matures.
This is the core of our effective “Trending and Pullback” lesson series and strategies.
We want to be cautious – find other candidates – when negative divergences overtake a strong but mature uptrend.
Nevertheless, Disney (DIS) continues its magical journey higher.
Continue following this popular stock along with others in similar patterns at new swing highs.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”