Here’s how to get long Mickey Mouse. (January 16, 2015)
DIS
This is a Free Chart video on Disney ( NYSE:DIS ); they announce earning on February 3rd, I’m actually doing this video on Friday night the 16th so that’s over two weeks from now. This stock has effectively been trading in a sideways range for about the last three weeks.
I’m looking at two things: first of all I’m looking at this, this is a pretty nice uptrend, this is not a trading stock this is a holding stock, it’s Mickey Mouse, he wiggles, not that much; it just keeps kind of marching higher, but there are these volatile times. The stock’s kind of entering in to a little bit of a volatility squeeze.
So here’s my suggestion, if you’re interested in owning Disney ( NYSE:DIS ) buy half a position now, keep your powder dry on the other half until after earnings. Let’s say the company announces some really strong earnings, you’ve got a $100.00 level here that would probably create some selling pressure. If the stock gets up to $100.00 all these holders could say, “If it gets up to $100.00 I’ll sell.” That could really be the cap here, so you just want to have a half a position.
But the other thing is, lets say the stock trades down like it did back here, a little different these days than it was in early October, but lets say the stock trades down to 90.00. Now you can buy more and you’ve got a cost basis. If you bought half at 95.00 then you buy the rest at 90.00 you’ve got a cost basis of 92.50, which is right around where the 200-day moving average is.
So my point is this, you want to know when a company announces earnings; you’ve got to know when earnings are going to be reported. You look at the trend, and then you assess both scenarios; what happens if the stock goes up, what am I going to do? What happens if the stock goes down, what am I going to do?
I will tell you this, it’s dangerous to hold stock of a company over earnings; you just don’t know what’s going to happen, as a trader. If you’re in investment it is unavoidable that you are going to hold a stock over earnings, otherwise you’re not an investor you’re a trader who holds no positions longer than three months.
Disney ( NYSE:DIS ) is in an uptrend, my bet is it’s going to keep going. I would say if you want to jump on this one buy half a position now, wait until after earnings are reported, and then make the other half of that trade.
Free Chart