Walt Disney Co (NYSE:DIS) Tales Humming Old Tunes

One of the biggest announcement that came on Monday was when Emma Watson said that she would star as Belle in Walt Disney Co (NYSE:DIS)‘s remake of Beauty and the Beast. The news follows the company’s recent announcement of scheduled March release of ‘The Jungle Book’ and ‘Cinderella’. The pipeline of productions and releases indicate that the company does not want to experiment with the new ideas. The focus is centered around adapting timeless tales from the past, which are a clear guarantee of reaping money at the Box Office.

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The Disney Tale

It could not be said entirely that the company is steering off from originals, where the hits like ‘Frozen’ and ‘Big Hero 6′ are self-explanatory, but the focus is diverting. The company eroded much of its value after experimenting with 2010 release “The Sorcerer’s Apprentice’ and ‘Atlantis: The Lost Empire and Treasure Planet’. Thus, learning from these mistakes, the company is more drawn towards repackging and presenting the old tales into new ones. Even the company’s ‘Tangled’ and ‘Frozen’ adopted classic formula of including songs and exotic background that turned these movies into super hits. The recipe of a box office hit is already with Walt Disney Co (NYSE:DIS), which managed to gross huge profits through its ‘Alice in Wonderland’ and ‘Maleficent’, both of which had a lot in common.

Lost Value In The World Of Streaming

Alongside a fading supply of original content, Walt Disney Co (NYSE:DIS) is also battling with the lost glory of its 80-year old “Vault”, a catalogue that contains all of the company’s animated movies. Before the video-streaming, Disney used to monetize through sale of animated movies from its vault for a brief period. However, the latest technology that allows instant streaming and Netflix, Inc. (NASDAQ:NFLX) has made the vault less attractive.

Having said that, it will be important to note that Disney is playing safely with its flicks, which fetch easy money and appeal to a wide range of audience. All one can expect is to see more remakes and adaptations going forward.

Technicals

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The long term chart of Walt Disney Co (NYSE:DIS) shows the bull market adequately but there are some danger signals flashing, which can be seen only on the short term charts. The daily chart shows all the recent price action taking place in a very narrow channel with a lot of stalling visible near the highs. This kind of overlapping upmove, coupled with decreasing volume, precedes a sharp correction most of the times. Unless the channel is broken on the upside soon, with an increase in the volume, the stock may suffer from a sharp crack down.

About the Author

Adam is a staff reporter for US Markets Daily Publications & Media, covering foreign affairs and domestic policy.

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