Disney Earnings Preview: Stock Charts Signal Breakout

Have you ever watched a stock hover at a make-or-break point, teasing traders with every tick? That’s Disney right now, heading into its earnings report this Thursday morning before the bell. Shares have danced in a wide range for years, but the charts are whispering something bigger might be brewing.

The Crossroads Moment for Disney Stock

Let’s paint the picture. Back in late 2022, when the board brought Bob Iger out of retirement to replace his successor, the stock sat around $91. The announcement sparked an immediate rally, pushing shares toward $120 within months. But since then? It’s been more of a holding pattern, bouncing between roughly $80 on the low end and that $120 ceiling that just won’t budge.

Fast forward to today, and 2025 has been remarkably flat for Disney investors. No major gains, no crushing losses—just sideways action that leaves everyone wondering if this is the calm before a storm. In my view, these quiet periods often set the stage for the most explosive moves. And with Iger entering what he’s called his final year at the helm, the pressure is on to deliver a legacy-defining performance.

Investors aren’t just watching earnings for the numbers. They’re listening for updates on everything from the ongoing YouTube TV dispute to cost-cutting progress in streaming. How are consumers spending at the parks? What’s the latest on direct-to-consumer profitability? Oh, and perhaps most intriguingly—who might step into Iger’s shoes when he finally steps down?

Short-Term Setup: Coiled Spring Action

Zoom in on the daily chart, and the tension becomes crystal clear. Since peaking in June, Disney has trended lower in a narrowing channel. Price action has squeezed between the 50-day and 200-day moving averages, creating what technicians love to call a coil or pennant formation.

Here’s where it gets interesting. That lower boundary sits firmly around $110, a level that’s held as support multiple times this year. Meanwhile, the upper trendline keeps pressing down, forcing shares into an ever-tighter range. Something has to give—and soon.

Coiled patterns like this often precede sharp directional moves, especially around catalysts like earnings.

– Seasoned chart analyst

Momentum indicators are flashing early bullish warnings too. The Relative Strength Index (RSI) shows a clear bullish divergence—price making lower lows while RSI holds higher lows. That’s classic hidden strength. Add in a fresh buy signal from the MACD histogram, and the near-term picture tilts toward upside resolution.

• 50-day moving average acting as dynamic resistance overhead
• 200-day moving average providing foundational support below
• Volume shrinking during consolidation—typical before volatility expansion
• RSI divergence suggesting buying pressure building beneath the surface

Short-term traders have a simple game plan: watch for a gap above the 50-day average on earnings. If Disney opens strongly and holds that break, the path of least resistance points back toward $120 before year-end. Fail to clear it, and we might test $110 support again. But the setup favors the bulls here.

Longer-Term Perspective: Trend Reversal in Progress

Pull the lens back to a weekly chart spanning five years, and the story shifts from tactical to strategic. What stands out immediately is that Disney has already broken its multi-year downtrend line dating back to the 2021 all-time highs.

More importantly, price now trades above both the 50-week and 200-week moving averages. Even better? Those averages recently formed a golden cross—the 50-week crossing above the 200-week. While golden crosses can lag on shorter timeframes, on weekly charts they carry serious weight as confirmation of major trend changes.

History buffs will note the last weekly golden cross occurred in June 2010. What followed was a multi-year bull market that carried Disney from the $30s to over $200 by 2021. Could lightning strike twice? The structural similarities are hard to ignore.

Of course, charts don’t exist in a vacuum. Fundamentals will determine whether this technical breakout has legs. But from a pure price action standpoint, Disney appears to be laying the groundwork for its next major leg higher.

Key Levels Every Trader Should Watch

Let’s break down the critical zones that will define Disney’s immediate future:

The downside scenario isn’t pretty. A decisive break below $110 would likely trigger stop-loss cascades toward the $102-$105 zone where Disney found buyers during its 2023 lows. At that point, the stock returns to no-man’s-land, requiring months of base-building before another legitimate upside attempt.

But here’s what excites me about the risk/reward math. Even conservative upside projections from a $115 breakout point toward $130 within 6-12 months—that’s roughly 13% from current levels with defined risk below $110. For longer-term holders willing to weather earnings volatility, the asymmetry looks compelling.

What Earnings Need to Deliver

Charts can point the way, but earnings provide the fuel. Investors will dissect guidance across Disney’s three main pillars:

1. Streaming profitability – When does Disney+ finally turn free cash flow positive?
2. Parks resilience – Are consumers still willing to splurge on experiences despite economic headwinds?
3. Content pipeline – Can theatrical releases and sports rights drive subscriber growth?

The YouTube TV carriage dispute adds another wildcard. Resolution could unlock millions in affiliate revenue; prolonged blackout risks subscriber churn across both platforms. Management’s commentary here will move markets.

The streaming wars aren’t over, but profitability inflection points separate winners from survivors.

Cost-cutting remains Iger’s calling card since returning. He’s already extracted billions in savings, but investors want proof these efficiencies are sustainable without gutting growth initiatives. Any hint of margin expansion in the direct-to-consumer segment could light a fire under shares.

Succession Speculation and Leadership Premium

Perhaps the most under-discussed catalyst: CEO succession. Iger has committed to staying through 2026, but the clock is ticking. A smooth transition plan—or better yet, naming an heir apparent—could remove a major overhang that’s capped multiple expansion for years.

Think about it. Disney trades at a discount to pure-play media peers partly because of leadership uncertainty. Clarity on the next regime might finally allow the stock to price in its ecosystem advantages: unmatched content library, global park monopoly, sports rights moat.

I’ve always believed great companies eventually reward patient shareholders. Disney’s brand strength hasn’t diminished—execution has. With Iger laser-focused on his final act, this earnings report feels like a referendum on whether the turnaround narrative still holds water.

Positioning for the Move

So how should investors approach this setup? Three scenarios to consider:

• Aggressive entry: Buy strength on a gap above $115 with tight stops below $110
• Scale-in approach: Average into weakness near $110 support, adding on confirmed breaks higher
• Options play: Long-dated calls targeting $130 strikes for leveraged upside with defined risk

Whichever path you choose, position sizing matters more than ever around earnings. Volatility will spike Thursday morning—expect 5-8% swings in either direction. The beauty of technical setups like Disney’s current formation is that they provide clear invalidation points. Respect those levels, and the market does the heavy lifting.

Looking further out, a sustained move above $120 would confirm the weekly golden cross and likely attract institutional accumulation. That’s when the real money starts flowing in, pushing shares toward $150+ over the next 18-24 months in a best-case scenario.

The Bigger Picture for Entertainment Stocks

Disney doesn’t operate in isolation. The entire media sector faces similar crosscurrents: cord-cutting acceleration, advertising softness, streaming investment burdens. Yet Disney’s diversified revenue streams—parks generating 35% of operating income, linear networks still throwing off cash—provide defensive qualities peers lack.

Consumer discretionary spending holds the key. Recent data shows theme park attendance stabilizing after post-pandemic surges cooled. If domestic travelers continue prioritizing experiences over goods, Disney’s domestic parks become a growth engine again. International expansion, particularly Shanghai and potential new markets, adds another layer of upside.

Sports betting integration represents another sleeper catalyst. As ESPN Bet gains traction, the flywheel between content, data, and wagering could create a moat traditional media can’t replicate. Early metrics suggest user engagement exceeds expectations.

Risk Factors That Could Derail the Thesis

No analysis would be complete without acknowledging what could go wrong. Beyond the obvious $110 breakdown, consider:

• Prolonged economic slowdown crushing park spending
• Streaming price wars eroding ARPU gains
• Content strikes disrupting release slate
• Regulatory scrutiny of sports streaming joint venture
• Succession drama spilling into public view

Each represents a legitimate risk, but also a known quantity already priced into shares trading at 16x forward earnings—hardly a nosebleed valuation for a blue-chip growth name. The margin of safety feels adequate for investors with a 12-18 month horizon.

Perhaps the most interesting aspect is how Disney’s chart setup mirrors broader market dynamics. After years of multiple compression across mega-caps, technical reversals like this often mark sector rotation points. Entertainment stocks led the 2010s bull market; could they surprise again in the 2020s?

Final Thoughts Before the Bell

As Thursday approaches, Disney stands at an inflection point both fundamentally and technically. The charts suggest upside probability exceeds downside risk, with clear levels defining each outcome. Earnings will provide the catalyst, but the setup has been building for months.

For Bob Iger, this report carries extra weight. A strong beat with confident guidance could cement his legacy as the executive who rightsized Disney for the streaming era. A miss might raise questions about whether the turnaround needs more time—or different leadership.

Either way, volatility creates opportunity. The stock that couldn’t break $120 for three years suddenly looks ready to test that barrier again. Whether it succeeds may tell us a lot about where consumer discretionary stocks—and the broader market—are headed next.

I’ve learned over the years that the best trades often feel uncomfortable at entry. Disney fits that profile today: widely owned, widely debated, trading in no-man’s-land. But sometimes, that’s exactly where the biggest rewards hide. Keep an eye on those key levels Thursday morning. The Magic Kingdom’s next chapter might be about to begin.