Coca Cola, Disneyland and Chicken Wings
Traders wanting exposure to the upside of Walt Disney (NYSE: DIS) ahead of the company’s scheduled earnings report can’t say they weren’t offered a good deal earlier in the month when the stock pulled back. Twice in January, shares of DIS went on multi-day slides, earning significant short-term positive edges and ratings upgrades. These pullbacks gave active investors who look to buy weakness rather than sell it the opportunity to pick up Disney at prices nearly 4% lower than they are as of Friday’s close.
A pullback that took Disney lower for four out of five days in the first half of January, earning the stock a “consider buying” rating of 8 out of 10, was followed by a three-day gain of 2%. A retreat in the second half of January takes DIS down for four days in a row – including a finish in technically oversold territory. Three days later, the stock is trading higher by one and a half percent and nearing new, short-term highs.
For traders who are looking for an opportunity to get into Disney, the company’s upcoming earnings report could provide a catalyst, particularly if there is additional strength in the stock after Monday’s session. That would create a technically overbought environment that could encourage traders to sell the news when Disney announces, locking in recent gains and looking for an opportunity to re-enter the stock at a lower level. As of Friday, shares of Disney had neutral ratings of 6 out of 10, and no significant short-term, edges – positive or negative.
Also scheduled to report quarterly earnings on Tuesday is Coca-Cola (NYSE: KO). Shares of KO have been under fairly consistent selling pressure every since rallying to new, intermediate term highs in early January. Even on days when the stock did not close lower, Coca Cola has frequently opened near its highs over the past few weeks, only to finish the session near its lows.
As of Friday’s close, shares of Coca-Cola are short-term overbought once again, despite trading well of the session’s best levels.
And to complete our Super Bowl trifecta, there’s the upcoming earnings report from Buffalo Wild Wings (NASDAQ: BWLD). BWLD is reporting on Tuesday, as well, and after rallying by more than 2% on Friday alone to cap up a four-day consecutive session winning streak that has seen the stock gain well over 8%, is back in overbought territory above the 200-day and more than due for a short-term pullback.
Shares of BWLD have a neutral rating of 4 out of 10, and a negative edge in the short-term of more than three-quarters of a percent.
Want more stocks? Read our latest from 7 Stocks You Need to Know: Trading a Double Shot of Peet’s Coffee and Tea.
David Penn is Editor in Chief of TradingMarkets/com