Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How Investors can Maximize Disney Stock "Magic"

Companies / Options & Warrants Mar 27, 2015 - 11:24 AM GMT

By: Money_Morning


Even though we're in the middle of March Madness right now, I'm not going to talk about this year's "Cinderella" teams, which come out of nowhere and make it to the Final Four in college basketball.

No… the real Cinderella story is happening at U.S. box offices. A simple Disney remake of the classic film managed to gross over $70 million in one weekend earlier this month. There's clearly investment potential in this success.

Let's take a look at Disney's Cinderella story and let its magic bolster our investment profits.

Leveraging Old Films to Generate New Profits

Who besides Walt Disney Co. (NYSE: DIS) could take a remake and turn it into last weekend's second-highest grossing movie?

The special effects, and what Disney's Pixar Animation Studios did to revamp the movie, are what made it great (I know, I watched and enjoyed it). The film could well win some awards for its digital effects and it was no surprise to me to see it doing so strongly.

Is there a similar Cinderella story when it comes to DIS stock?

As the following chart shows, Disney stock has been in a marked uptrend now for several months. Simply drawing a line connecting the two most recent lows together on the bottom of the chart and doing the same thing for the two most recent highs reveals the direction that Disney stock wants to move.

Disney stock

The higher DIS stock price climbs, the more these two moving averages will separate, which is a tremendous bullish sign. The technical term "enveloping" is another way to take a moving average and create a range from it. The chart above also has a 50-day moving average, indicated by the blue shading, with a + and – 10% range. Shown here, it represents enveloping. Right now DIS is on the upper side of this envelope channel, meaning that it could see some pullback soon. It's possible that 90 (the bottom of the envelope at present) could be price support and the stock continues to have upside momentum.

Speaking of momentum, recently Disney broke above the $107 resistance, trading as high as $108.94, perhaps behind momentum from the film's pre-screenings.

Moving averages, (MA) while not creating momentum, are one way to gauge it. A moving average is created by using past data and then averaging that data over time within a window of time that "moves" along with the calendar.

So rising stock prices create rising averages, and vice versa. Of all the moving averages tossed around out there, most medium-term traders favor the 10-day and 30-day MA. Think of the 10-day as short-term trend and 30-day longer-term trend. We want to see the 10-day above the 30-day, but this can also be used to spot changes in trend. In recent weeks the 10-day MA has remained above the 30-day.

It's all leading up to some great profit opportunities…

Disney's Profit Target Is Box Office Gold

In my estimation, Disney has the potential to hit $150 by year's end, a nearly 30% gain from its price as I write this.

Some of that will be dependent on outside circumstances such as interest rates, as well as other economic indicators gauging consumers' discretionary spending.

However, if we even approach my estimate then it's possible that continued box office smashes like "Cinderella" and the sleeper of the year "McFarland, USA" as well as its formidable resort, amusements and merchandising revenues, could drive record profits for Disney.

The question is, how can we take advantage of the potential for a continued 20% move in Disney stock, but make perhaps 100% + returns with 90% less cost and risk?

Here's where options come in.

Buying longer-term call options that are close to the money can offer both lower cost and lower risk, as well as higher upside return on investment. A call option grants the buyer the right to purchase a stock at an agreed upon price, for an agreed amount of time.

Disney stock price

Recently, call options on DIS for January 2016 that are near the current stock price were trading around $7.00 per contract. Since one contract controls 100 shares of stock, the total cost is around $700 per option.

This means the options cost roughly 6% of what it would cost to own the stock outright. All with the opportunity to obtain a 100% return.

That, my friends, is why I trade options: They're a cheaper way to enter a position coupled with maximized profit potential.

Source :

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in