Avatar: The Way of Water’s Impact on Disney’s Share Price 

Disney’s share price has been on a strong downward trajectory since peaking at a whopping $203.02-per-share in March of 2021, as consumers pulled back spending on discretionary items amid a multi-decade surge in cost-of-living expenses. Indeed, the much-beloved entertainment firm slid just shy of 60% to bottom at $84.07-per-share on December 28^th of last year. However, since then Disney has climbed 16% higher to jump back above key resistance at the $100-mark for the first time since early-November of 2022. One of the primary drivers of this meteoric rise has been the success of James Cameron’s “Avatar: The Way of Water” at the box office.  

After a sluggish opening weekend which saw the long-awaited “Avatar” sequel bring in only $134 million – falling far short of consensus estimates of $175 million – the new film raked in $253.7 million in the US in the following 10 days. That easily surpasses the $212 million brought in by the first “Avatar” in 2009 over the same timeframe, which bodes incredibly well for the sequel given the former would go on to be the highest grossing film of all time. Having said that, “The Way of Water” is one of the most expensive movies ever made and will need to make roughly $2 billion in ticket sales to make a profit. This isn’t out of reach though, considering the first “Avatar” made just shy of $3 billion in global ticket sales. Outperformance of Disney’s key release and the high likelihood that we have passed peak inflation could provide the platform for the company to outperform its peers throughout 2023.  

Disney (NYSE: DIS) Daily Price Chart – Clearing 200-MA May Ignite Bull Trend 

From a technical perspective, the outlook for Disney is bullish as prices easily break through the downtrend extending from the November 2021 highs and clamber back above the 200-day moving average for the first time since September of 2021. 

Above average volume throughout the recent climb higher suggests that bulls are firmly in control and suggests that higher highs are on the cards in short-term.  

Remaining constructively positioned above support at $100-per-share will probably encourage buyers and precipitate a push to challenge key psychological resistance at $120.  

However, if sellers can force price back below the 200-day moving average, a reversal back towards the yearly open can’t be ruled out.  

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