DIS improves within potential big base

Question: Is DIS improving?

Yes, The Walt Disney Co. (DIS) is improving and remains within the developing big base dating back to mid 2022 noted in the August 26 The Stock Pulse report.

The early July to late November pullback held an important support at the declining 200-week moving average (WMA) and the 50% retracement of the April-July rally in the 103 to 102 area. In our view, continuing to hold 103-102 would bode well the larger base-building process for DIS.

The stock could close above its 13- and 40-WMAs today at 109.37-109.73, placing the focus on the 26-WMA at 114.18, where a breakout would target the upper end of the base and key 38.2% retracement level at 124.69-126.20.

It would take a decisive rally above 124.69-126.20 to confirm the big base and set the stage for a stronger advance on DIS toward 140-141 (50% retracement), 155-156 (61.8% retracement), and then 170 (big base pattern count). Until then, regaining and holding the WMAs (114 to 103) would maintain the potential for a big base breakout.

DIS still shows signs of bottoming relative to the S&P 500, even after undercutting the April 2025 and August 2024 relative lows. While this stock shows bullish rotation on a tactical basis, it is a long way from breaking out into a more enduring leadership trend versus the broader U.S. equity market.

Chart 1: Disney (top) and relative to the S&P 500 (bottom)