The expert analysts keep saying that we should be bullish on Walt Disney Co. Meanwhile, the stock’s price keeps dropping. For a value investor, this is a dream come true, if those analysts are correct. All you need to do is buy a bunch of shares and just wait. If now is the time to be bullish, and Disney shares really are as underpriced as the experts say, then even if the stock drops several more dollars in price, then the long term outlook is really good for the company.
Disney has received some bad news recently with the heir apparent to the CEO position announcing that he will be leaving the company in May. It undoubtedly does add some confusion to the company as current CEO Iger can’t stay with the company for forever. However, in the grand scheme of things, this isn’t the worst news that the company could receive. People come and go within companies, and Disney is no different. Having a few great leaders is a key part of success, but overall, the company’s leadership structure and culture is far more important than any one person’s influence. Disney has gone through some big changes in the last 15 to 20 years, and they have shown that they have a strong team. There’s no reason to fear the loss of leadership here.
Disney is one of more highly traded stocks when it comes to binary options, and the discrepancy between what the professionals are saying and what is actually happening over the short term can be frustrating for newbie traders. When people that know the markets well are saying one thing, while the opposite is happening, can be extremely frustrating, especially if you are new to the markets. Instead of relying on the experts, it’s important that you be doing your own analysis, and taking out short term positions that do not rely on long term predictions. These two occurrences seem like they are contradictory, but in reality, they aren’t at all. Instead, they are looking at two different things. Long term predictions take into account where prices will be a year or more from now. The short term can fluctuate up and down minute by minute, or some variation of this. The experts can help you to formulate a long term outlook, but they won’t help you with your short term trades, especially those that can fluctuate wildly like what we see with binary options.
If you are trading Disney as a binary option, call options may not necessarily be the right move here. You should move with the trend as this gives you the highest probability of success, but Disney’s trend right now is sideways. It’s been a rough last 52 weeks for the company, and although the price should move upward, there’s still not a dominant trend that we can clearly take advantage of. This means that you should focused on short term technical analysis, looking for price channels and making trades based off of the fluctuations that will occur within those channels. Ideally, we would like to see the stock move forward in some noticeable way before we start taking out consistent call options, but right now, trading the range bound stock when it’s at either its top or bottom is the best way for binary traders to approach it. If you are not able to stomach the kind of risk that is associated with this, it’s best to wait for Disney to start living up to all of the hype that it’s been getting before you think about executing any short term trades on it.