Genius Brands International, Inc (NASDAQ:GNUS) gapped up 31% on Wednesday after the company announced it had signed a 20-year deal with Walt Disney Co’s (NYSE:DIS) Marvel Studios.
The deal, centered around Genius Brands and POW! Entertainment’s venture Stan Lee Universe LLC, will allow Marvel Studios to license the Stan Lee name and likeness for use in films and television and for Disney’s theme parks, experiences and merchandise.
Unfortunately for bullish traders and investors, the bear market cycle underway in the general markets hampered Genius Brands’ rise and the stock had given back about 20% of its gains in afternoon trading.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The Genius Brands Chart: The sharp rise to the 93-cent mark on Wednesday negated the downtrend in which Genius Brands has been trading since March 29, as the stock printed a high above the most recent lower high of $0.749 formed on April 29. Genius Brands’ hasn’t confirmed a new uptrend yet because the stock hasn’t printed a higher low above the most recent low of 51 cents that was created on May 12.
- On Tuesday, Genius Brands regained the eight-day exponential moving average (EMA) and on Wednesday the stock regained the 21-day EMA as support. If Genius Brands is able to remain above the 21-day for a few days, the eight-day EMA will cross above the 21-day, which would give bullish traders more confidence going forward.
- If Genius Brands closes the trading day near its low-of-day price, it will print a bearish Marubozu candlestick, which could indicate lower prices will come on Thursday. The second most likely scenario is that Genius Brands will form an inside bar pattern to consolidate its soaring share price, which would lean bullish for upside continuation on Friday.
- Bullish traders who aren’t already in a position may choose to wait for Genius Brands to form a reversal candlestick, such as a doji or hammer candlestick, on its next retracement in order to enter into a position. Ideally, the retracement lower should come on lower-than-average volume.
- Genius has resistance above at $1.01 and $1.32 and support below at 65 cents and the 36-cent mark.
See Also: How to Read Candlestick Charts for Beginners
Photo: Courtesy of Gage Skidmore on Flicker
