Last week, things seemed like they couldn't possibly get any better for The Walt Disney Company (DIS). The shares soared heading into the premiere of the latest "Star Wars" movie, and the company announced a $52 billion acquisition of Twenty-First Century Fox, Inc. (FOX), bringing the film rights to more Marvel characters such as "X-Men," along with other properties like "Avatar," into the House of Mouse. 

"Star Wars: The Last Jedi" opened to a $220 million take at the North American box office and $450 million worldwide, the second biggest opening weekend of all time, surpassed only by "The Force Awakens" two years ago. Disney shares, however, have been unable to keep the party going. Resistance has come in near $112.00, short of the 52-week high near $116.00. It appears that traders are thinking that all the good news is now priced in and are starting to take profits against the news. In a pullback, $110.00 or $107.50 could be tested – possibly even $104.00, where the latest rally started.


While the theatrical run for "The Last Jedi" is off to a good start, one longer-term concern has emerged over the weekend – the reception by fans on review sites has been a lot worse than the reception from critics. Time Warner Inc. (TWX) found out recently that mixed reception and creative issues can eventually catch up to its franchises when "Justice League" performed poorly at the box office. In the weeks around the "Justice League" debut, Time Warner shares fell from $104 to $86, but the stock has since started to recover.

For Disney, the film most at risk of underperforming looks to be the upcoming "Star Wars" Han Solo movie, which is set to open in late May, less than six months from now and about three weeks after the next "Avengers" movie. On top of potential exhaustion from being the fourth "Star Wars" film release in less than two and a half years, like "Justice League," the Han Solo movie has gone through mid-stream director changes and reshoots, which are often seen as a sign of trouble.

Meanwhile, Disney also faces acquisition and integration risks related to the Fox deal. In merger transactions, the shares of purchasing companies often fall, but so far, traders have been looking at this deal through rose-colored glasses.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.