Will Disney’s Stock Gains Open a Stitch?

The Disney stock (DIS) has run up around 31% since the beginning of April.

With the announcement of Disney’s own Disney+, to compete with Netflix, no less than 18 analysts gave the stock an upgrade.

That’s great if you bought the stock before the news (my Advantage service did.)

However, the economic Modern Family, is mimicking a scene from the Disney franchise, Lilo & Stitch.

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In that film, two eccentric and mischievous characters find one another.

One is a little girl, whose parents died in a car accident. 

The other is a genetically engineered creature that was made to cause chaos and destruction.

Let’s assume our “sister” Semiconductors ETF (SMH) is the little girl. We have never met her parents. 

But her granddad is the Russell 2000 (IWM). 

He may not be dead, but he behaved today as though he had a car accident. 

The genetically engineered creature could be Biotechnology (IBB). 

He caused chaos and destruction in his own sector, which could spill over elsewhere.

By the end of the film, the two bond, and Stitch reconsiders his destructive ways.

Does that mean IBB will reconsider his?

Let’s look at the price action (chart below):

stock market etfs trading smh iyt iwm analysis news april 17

Far left is the Daily chart of Semiconductors. 

Today, it had a breakaway gap higher. That is when an instrument literally breaks away from its historical price action and gaps to a new all-time high.

In the middle is Biotechnology. Our Stitch, fell by nearly 4% today. 

It barely caused any havoc though, in anything but a few miscellaneous stocks as well as in IWM and that basket.

On the far right is the Russell 2000. IWM had a sharp decline early on. 

By the end of the day, IWM failed to hold the 200-Daily Moving Average. It did nonetheless, bounce off the lows of the day.

If Stitch (or IBB) turns around and rallies from here, then perhaps this has a happy Disney movie ending.

If not, you might see SMH go from a breakaway gap to an island top.

Then, the market will end like a darker Disney movie-say, Monsters, Inc.

S&P 500 (SPY)  – New Swing high at 291.42 with all-time high 293.94. Then, it closed red making 288.99 important to hold. 

Russell 2000 (IWM) – If this cannot close tomorrow-the end of the trading week-over 156.18, it confirms a weaker phase. If it breaks 154.75, the 50-DMA worse still

Dow Jones Industrials (DIA)  – Swing high at 265.32. That means must hold 263 

Nasdaq (QQQ)  – New all-time high at 187.93. 185.40 now the support to hold

KRE (Regional Banks) – Confirmed recuperation phase making 54.30 pivotal 

SMH (Semiconductors) – New all-time high today at 118.83. What you do not want to see is a gap below today’s low 116.89, that does not get filled.

IYT (Transportation) – Swing high at 197.97. December 2018 high 199.09. 194 should hold if good

IBB (Biotechnology)  – Nasty candle. The key support to watch is the 200-week moving average at 103.78

XRT (Retail) – 45.50 pivotal  

Twitter:  @marketminute

The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.