Ahead of Earnings Tomorrow, Here’s a Trading Plan

The coronavirus pandemic has been a perfect storm for The Walt Disney Company. Movie theatres are closed around the world, delaying new film releases. ESPN (owned by Disney) is hurting in particular, without live sports to broadcast.

Additionally, Disney’s most popular revenue streams – theme parks and cruises, aren’t operating.

The one Disney (NYSE: DIS) segment that has benefited from the quarantine is it’s direct-to-consumer streaming unit. This is attributable to television and movie watchers sheltering in place at home. According to Barrons, Disney recently stated they’ve reached 50 million paid subscribers, which upon initial glance may suggest profitability for the company itself.

Not quite yet… Disney as a company also stated that the company is still in heavy investment mode with its streaming service, and therefore those 50 million paid subscribers aren’t profitable yet.

Investors will get their first glance under the hood at how Disney’s business performed during the coronavirus pandemic on Tuesday evening, when the company reports its fiscal second-quarter 2020 earnings after the market closes.

Financial professionals will be zoomed in on what Disney’s second-quarter 2020 earnings results look like, especially upon Disney’s surprising announcement that its up-and-coming streaming product has yet to become a profitable segment for Disney as a company.

As we enter a new week of trading, I expect to see some volatility in Disney’s stock, especially considering second-quarter earnings are scheduled to be reported tomorrow.

From a trader’s perspective, I’m currently bearish on Disney as it’s trading below its 50-day simple moving average line, shown in red in the chart above.

Should trading trend below Disney’s 50-day simple moving average line, I’ll be interested in making a short biased trade and collecting all available profits by the end of the day.

But what if markets rally to the upside and Disney’s stock does too? This is where it’s essential to know how to make money in green and red markets as a trader – which is exactly what I’ll be teaching you how to do in the future.

Should Disney trade above its 50-day simple moving average line, I’ll simply take a bullish position on Disney, with the intention of closing the position ahead of Disney’s upcoming earnings announcement.

Yours for TrackStar trading,

Davis Martin
America’s #1 Premarket and Day Trader

Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.

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