Mulan debut allows Disney to ‘flex’ its muscle,’ trader says. Here’s why

Disney could have unveiled a bit of magic.

Disney debuted its live-action blockbuster Mulan on its Disney+ streaming platform ahead of the long weekend. The film is available for a premium price months after its expected premiere back in March. Investors hope for another streaming smash hit similar to its Hamilton release earlier in the summer

Gina Sanchez, CEO of Chantico Global says the house of mouse is about to make a very valuable move.

“Disney+ has a lot of legs,” said Sanchez on CNBC’s “Trading Nation” on Friday. “Right now it’s a new shiny toy, and I think it’s going to remain that way. … I think this could be a very valuable move for Disney, and also to flex the muscle of their Disney+ streaming channel.”

Disney has made a steady climb back from its March lows, but is still down nearly 9% for the year. The company was forced to shut the doors temporarily on many of its parks due to the Coronavirus pandemic, but Sanchez says that once things get back to normal, Djsney could outperform again. 

“If you look at the things holding them back … the inability to open their parks, the challenges they have around sports,” said Sanchez. “Within the next six to12 months, we’re going to see some changes there that are going to be very beneficial to Disney, so I would actually think that as soon as we get back to a more normal situation, Disney could participate significantly more than the market.”

Matt Maley, equity strategist at Miller Tabak, points out that although the stock is lagging, you shouldn’t count Disney out.

“The stock actually hasn’t been acting all that badly,” Maley said during the same segment. “Even though it hasn’t been as aggressive in its rally as a lot of other stocks, it has still been making a series of “higher lows” and “higher highs” in a nice upward sloping trend channel.”

Maley does point out that Disney is reaching some overbought levels, which is why it’s pulling back with the rest of the market.

“One of the good things that could take place in the next week or two is that it would see a golden cross with the 50-day moving average moving above its 200-day moving average. 2 out of the last 3 times that has happened, the stock has rallied dramatically after that has taken place, and the 3rd time, it didn’t go down, it just didn’t rally quite as dramatically. It still went up about 5% over the next month. So either way, it was a positive move.”

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