Disney’s stock could rally 70%, says one chart reader

Disney shares have underperformed the broader market this year, but two market watchers say there may yet be magic in the stock.

Looking back at the stock’s trend over the past 10 years, Gordon points to two distinct periods of the stock moving swiftly higher. And citing the Elliott Wave Theory, which argues that markets move in distinct phases and is used by technicians to predict a stock’s next wave, Gordon believes the next push higher may be coming.

“According to Elliott Wave Theory, market trends tend to unfold in 3 separate phases,” Gordon said in an email to “Trading Nation.” “Diving further into the theory, it will also show a tendency for the percent change realized in the first phase to be equal to, or two-thirds, of the percent change in the final phase.”

During the first push from early 2009 to early 2011, Disney rallied 192 percent. In this wave, Disney has rallied 17 percent from its May monthly low. A move to $192 would mark a nearly 100 percent rally.

He currently has half a position in the stock, and said that once it tops the $120 level he’ll be adding more. Ultimately, he thinks the stock could hit $192, which is nearly 68% above the current level.

Disclosure: Gordon, Bapis and Vios Advisors have holdings in Disney.

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