DIS - A mousetrap about to trip

I’m looking at Disney and they are struggling. Their earnings this last quarter reported Nov 10 were terrible. And not just terrible, but less than 50% below the previous quarter. The stock is responding in kind. Right now, Disney is at the breaking point. A crucial level of previous resistance and demand is acting as resistance around 153. If DIS breaks 151.5, I expect a landslide.

I would encourage you to read their latest earnings report. It’s pretty dim.

Some highlights.

  • Disney+ is growing at 60% YoY
  • Hulu is growing 20% YoY
  • They lost a lot of revenue from cancelled sporting events, theatre, and parks
  • They lost 1B complying with gov’t regulations, especially in regards to COVID
  • They lost a lot due to delayed and cancelled movies and shows
  • They are still incurring costs related to an ongoing massive reorg initiated in Oct 2020
  • Free cash flow decreased from 3.64B to 1.99B (54% decrease)

This means that any hope of a dividend resumption are probably off the table for a long time. People thought Disney was on the up and up as the pandemic wanes and their earnings were recovering over the past year (-0.2 => 0.32 => 0.79 => 0.8 EPS in prior quarters). This report at 0.37 EPS has killed those hopes.

The RSI is super oversold here, so I’m going to wait and see what happens. But on a 151.5 break downwards I’m buying puts. I could see it going as low as 130s. So I would be buying 17 Dec 21 130P. Or whatever is about 2-3 wks out from when it breaks.

I was making a hopeful play on Disney this week that just didn’t pan out. Typically after earnings there’s a period of dormancy and regression followed by explosive growth, however it just didn’t happen this time. Disney+ day had enough issues that it didn’t give it the shot in the butt it needed to grow. National Disney Day is the 6th, but that’s not exactly a momentous occasion for them. I’m thinking they’re going to need some good news in order to break this slump.

I like mid-December puts targets for this one though. I think you could see 150 failed support within the next couple trading days based on it’s slow bleed out this past week, personally.


There’s also a heavy SPY correlation. That’s why I’m waiting for the perfect storm. Bad news (or no good news), spy down, and the technical break.

Retesting yesterday’s low. Much earlier than I was expecting.

DIS just broke previous day resistance. I bought one Dec 17 130P because it was 0.20.

There was a bounce off of the 153 historical demand level. Still in a downtrend. Looking for direction.

Broke above 153.71. Walking upwards cautiously.

DIS running up quickly.

WTF am I even looking at?

Testing 153 again. Guh or double bounce incoming?

153 break. Heavy SPY correlation.

Recovered towards the end of the day. But the 153 break was really encouraging. I’m still bearish.

I’m seeing a big descending triangle forming.

With SPY feeling the pressure, this play could activate in a few days.

Time will tell if this is a double bounce or a wedge.

Puts on my childhood? I’m in.

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News came out about disney participating in sports gambling.

Disney also paused sales of its annual passes. Probably a good indicator that they’re sold out going into the holidays.

It is currently in an uptrend on this news. I’ve sold my single PUT for a $1 loss.

Sold mine for a 73% gain this morning

DIS hit a new low this morning of 151.93. Very close to activating.

DIS AT 151.55. LOOK OUT.

I have to go to work now, but watch this one.

I bought back in earlier this morning. Unfortunately I missed the big drop overnight.

Bought 2 contracts expiry 11/26 150 put strike. Let’s see some gains

You got super lucky with this covid news. Congrats.

Anyone else who played the non-FD options like me, congrats!!!