The entertainment powerhouse topped profit and sales expectations and updated on streaming numbers after launching its Disney+ platform. The stock had surged more than 2% on Tuesday, looking to bounce from January losses, ahead of that report.
JC O'Hara, chief market technician at MKM Partners, said a few key levels have formed in its charts.
"This has been a very powerful chart, especially in 2019," O'Hara said Tuesday on CNBC's "Trading Nation."
O'Hara points out the formation of a large base from 2017 to 2019 – the shares then surged more than 20% in April 2019. Through the second half of 2019, O'Hara said the stock took some "time to reset some of the indicators from overbought situations."
"Now we have to give Disney the benefit of the doubt, especially since it's right at that rising 200-day moving average. We haven't really broke below any technically significant levels," O'Hara said. "Ideally we would like to see the stock close above $150. That'll confirm the bulls are still in control, and that Disney is ready to take the next leg higher."
Disney needs to rally another 4% from Tuesday's close to reach $150. The shares haven't traded above that level since November. If they breach that, O'Hara said they could reach $170, clearing a November record of $153.41 -- that marks 17% upside from current levels.
Steve Chiavarone, portfolio manager at Federated Hermes, said Disney can dominate one key corner of the internet.
"You go to the internet for seven things, right? You go for map, search and video -- that's Google. You go for mobile -- that's Apple. E-commerce – Amazon. And then you have social media which is Facebook. The only vertical that still is competitive is entertainment. Netflix had the first mover advantage but now you have Disney coming on strong," Chiavarone said during the same segment.
Disney's quarterly report is the first since its launch of Disney+. Its streaming platform went live Nov. 12 and attracted 10 million subscribers in the first 24 hours, according to company figures. Disney reported nearly 27 million subscribers at quarter's end on Tuesday afternoon.
"At the end of the day, it doesn't matter how you distribute your product. No one cares if they're watching a program on phone, iPad, TV. The question is the quality of content. It's pretty hard to find a company that's better at creating content than Disney, and we don't see that changing anytime soon," said Chiavarone.