Seagate Technology Survived a Deep Correction and Could Rise 30% From Here

 | Mar 06, 2018 | 10:28 AM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


Seagate Technology plc (STX) survived a deep correction last month but it held the rising 50-day moving average line and is now in position for further gains. In January we reviewed the charts of STX, writing, "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."

In hindsight STX declined to $46 but did not close below $47. If you used a straight stop below $47 would have been stopped out. Let's pay a visit to the charts to see what we might expect the next few weeks.

In this updated daily bar chart of STX, below, we can see the quick decline in early February that ended with a test of the rising 50-day moving average line. Prices are above both the 50-day and the 200-day lines. The daily On-Balance-Volume (OBV) line has been rising since late July and its recent new high confirms the bull move in STX. A rising OBV line tells us that the buyers of STX have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator just turned up for a fresh outright go long signal.

In this weekly bar chart of STX, below, we can see that prices are above the rising 40-week moving average line. A price gap remains on this chart and reminds us of the strong shift in demand. The weekly OBV line has been rising strongly the past two years and tells us that buyers have dominated. The weekly MACD oscillator is also very bullish.

In this Point and Figure chart of STX, below, we can see the $73 price target we noted in our January review. A trade at $57 will be a fresh breakout.

Bottom line: If stopped out or not long STX I would look to go long on strength above $57 risking below $48 now. Look for gains to our $73 price target.

Read Real Money contributor Stephen "Sarge" Guilfoyle's take on STX and other dividend plays in his Market Recon column here.

Columnist Conversations

Facebook had outstanding earnings and looks to continue upward, while HD is a strong breakout on volume and Ak...
Stock picking contests can be entertaining and can provide some interesting ideas but if you seriously want to...
Your Reality Check. Check out Real Money's Helene Meisler's latest podcast here. Subscribe to Meisler's T...
XBTUSD (Bitcoin) On 4/25 Bitcoin top ticked @ 9755.52 and then FELL. Our first short term support @ 8990 was...



News Breaks

Powered by
Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.