Seagate Technology Plc (STX) was reported on back in November when we said, "Traders and investors who went long STX (in early November) should continue to hold longs and consider buying more on a trade above $40.99 which could come very soon. Sell stop protection should be raised now to a close below $36." With STX now trading around $54, I consider this one of my better recommendations. What should we do now?
In this updated daily bar chart of STX, below, we can see a strong move up since September. There is a bullish gap to the upside in late October and another gap earlier this month. Prices are above the strongly rising 50-day moving average line. Prices are also well above the 200-day average line which has recently turned positive. The daily On-Balance-Volume (OBV) line has been rising the past year and recently made new highs to confirm the advance. The trend-following Moving Average Convergence Divergence (MACD) oscillator turned positive back in October and remains in a bullish mode.
In this weekly bar chart of STX, below, we can see a bullish set-up. Prices have closed above the 2017 highs for a major breakout. Prices are above the rising 40-week moving average line. The weekly OBV line is in a strong advance and confirms the rally on this time frame. The weekly MACD oscillator moved to an outright go long position in December when the oscillator crossed above the zero line.
In this Point and Figure chart of STX, below, we can see a strong rally underway with a longer-term potential price target of $73.
Bottom line: Longs have a tiger by the tail. Raise sell stop protection to a close below $47. Some sideways price action would be welcomed and might be used to buy more STX, unless you are already over weighted. My new price targets are the $60-$65 area followed by $73.