Walt Disney Co was trading about 1% lower on Thursday after falling in sympathy with Netflix, Inc on Wednesday, which plunged almost 40% after printing its first-quarter earnings.
Disney’s decline on Wednesday began to pick up at 11:30 a.m. in reaction to a bear flag the stock had settled into on the four-hour chart.
The bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock higher between a channel with parallel lines or into a tightening triangle pattern.
For bullish traders, the “trend is your friend” (until it’s not) and the stock may continue to rise upwards within the following channel for a short period of time. Aggressive traders may decide to purchase the stock at the lower trendline and exit the trade at the higher trendline.
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