Disney - Shares Seeking Direction

Published on Thursday, 27 December 2012 04:57 Written by TradersHuddle Wire

New York, December 27th (TradersHuddle.com) - Shares of Walt Disney Co. (NYSE:DIS) closed the trading day higher by $0.06 or 0.11% from its previous close. Disney's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.

The Walt Disney Company (NYSE:DIS), the largest media company in the world, conducts operations in media networks, studio entertainment, theme parks and resorts, consumer products, and Internet and direct marketing. The Company produces motion pictures, television programs, and musical recordings, as well as publishes books and magazines. Disney also operates ABC radio and television, cable channels and theme parks around the world. Disney owns the most watch and valuable sports network in cable, ESPN. The entretainment company was founded by Mr. Walt Disney in 1923 and its based in Burbank, CA.

Disney's trading range is defined by a trough, which marked calculated support at $46.96 and by a peak that set the resistance point at $51.06. These levels are closely watched by traders managing their positions.

Traders wanting to establish a position in Disney or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.

The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.

Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Disney, given that the stock finished the session higher, bulls should monitor their positions for confirmation that the stock will continue higher by taking its intraday high. Below a Doji illustration: