Disney Makes Drama With the Loss of a Huge Shareholder
After reports that Isaac Perlmutter sold his entire Disney stake, let's check the charts.
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The financial media is reporting that Isaac "Ike" Perlmutter sold his entire Disney DIS stake after the proxy battle loss he participated in with Nelson Peltz and his Trian Partners, an alternative investment management fund. Perlmutter, the former Marvel Entertainment chairman, sold all of his Disney stock — about 25.6 million shares — for almost $3 billion, according to reports.
Perlmutter accumulated his DIS shares after Marvel was purchased by Disney in 2009.
Let's check out the charts and indicators.
In this daily bar chart of DIS, below, I can see that prices have continued to tumble lower from a high set in late March/early April. Prices have spent all of July below the 200-day moving average line and the declining 50-day moving average line.
The trading volume shows a spike in turnover in early May and that may have been part of the Perlmutter shares. The daily On-Balance-Volume (OBV) line has been in a decline from early April and tells me that sellers of DIS have been more aggressive than buyers with heavier volume being traded on days when DIS has closed lower. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero-line.
In this weekly Japanese candlestick chart of DIS, below, I see a bearish picture. Prices are pointed down toward the lows in the $80 area. A weekly close below $80 could precipitate further declines if it happens. The 40-week moving average line is rolling over. The OBV line and the MACD oscillator are bearish, too.
In this daily Point and Figure chart of DIS, below, I can see a price target in the $63 area.
In this weekly Point and Figure chart of DIS, below, I can see a price target in the $57 area.
Bottom line strategy: Perlmutter is an extremely private person so you should not expect to see him being interviewed today. I am going to take his sale of DIS as a no-confidence vote that traders need to pay attention to. Avoid the long side of DIS.
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