Today’s focus is on Walt Disney, which has had a volatile week. The stock saw an upswing earlier in the week, only to reverse sharply after its earnings report. The overall outlook is not encouraging at the moment. On the weekly chart, the price is forming a shooting star candle, a bearish indicator suggesting potential reversal.
While a shooting star on its own isn't always definitive, its significance increases when it appears at a key resistance level. In Disney’s case, the blue area, which has acted as resistance since mid-2022, is proving to be a major barrier. This area serves as the neckline of a larger inverse head and shoulders pattern (marked by red rectangles), making it a critical level for Disney's long-term prospects.
If Disney manages to close the week above this blue resistance, it would trigger a long-term buy signal, suggesting the potential for further gains. However, a bounce off this resistance, accompanied by the current shooting star, would reinforce the bearish sentiment and could signal a move lower. In that case, the price would likely target the yellow horizontal support, representing the lows from 2020 and 2023.