Can Disney break through wedge formation on ‘Shang-Chi’ release?
Shares in Disney have been trading higher after its subsidiary Marvel’s ‘Shang-Chi and the Legend of the Ten Rings’ recorded $90 million at the box office last weekend.
The superhero action movie was expected to rake in $63 million on the opening weekend. While investors thought it would be a gamble to release the move in cinemas, it seems to have paid off.
It’s a boost for entertainment venues that have been concerned about the rise in the delta variant. However, it’s a big boost for Disney as they can capitalise on movies released in the cinema as well as on its own Disney+ streaming service.
Source: Admirals MetaTrader 5, #DIS, Weekly - Data range: from 13 Apr 2014 to 7 Sep 2021, performed on 7 Sep 2021 at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
The long-term, weekly chart of Disney’s share price shown above shows a huge move higher after the pandemic lows in 2020. However, since the beginning of 2021, the share price has remained in a trading range known as a wedge formation.
The series of lower highs and higher lows highlighted from the descending and ascending black lines represent a period of indecision. If the price can break through the top of the wedge pattern it will be a sign of commitment from the bulls of the market that they believe the stock price should be higher.
While wedge patterns that have occurred in an uptrend are considered to be bullish there is also a chance the price could break through the wedge formation so risk management – as always – is key.
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