The Walt Disney Company (DIS) shares rose about 2% during Tuesday's session amid reports that the mobile app for its new streaming service Disney+ has been downloaded 15.5 million times in less than two weeks. According to Apptopia, the $6.99-per-month service brought in about $5 million through in-app purchases within its first 13 days – and that doesn't include those who paid for the service through the Disney+ website.
Wedbush analyst Dan Ives said earlier this month that these kinds of early numbers could point to a legitimate competitor for Netflix Inc. (NFLX) driven by a strong pricing, content, and bundling strategy. The service also enjoys some content advantages over Apple Inc.'s (AAPL) recently launched Apple TV+, although Apple TV starts with a significant install base and strong pricing compared to many streaming competitors.
The news also comes as the company's "Frozen II" brought in $127 million domestically and $223 million worldwide, making it the highest-grossing debut ever for any animated film – even though it was released outside of the summer season.
From a technical standpoint, Disney stock broke out from prior highs of around $150 reached earlier this month. The relative strength index (RSI) remains overbought with a reading of 74.64, but the moving average convergence divergence (MACD) continues to trend higher. These indicators suggest that the stock could see some near-term consolidation before extending its move higher over the coming sessions.
Traders should watch for some consolidation above reaction support levels at around $150 over the coming sessions. If the stock breaks down from these levels, traders could see a move toward reaction lows of around $140 or the 50-day moving average at around $134.80. If the stock continues to break out, traders could see a move to fresh highs
The author holds no position in the stock(s) mentioned except through passively managed index funds.