• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Western Digital's Decline Could Be Nearing an End

Early bottoming action in WDC has started.
By BRUCE KAMICH
Oct 04, 2018 | 01:45 PM EDT
Stocks quotes in this article: WDC

We have not looked at Western Digital Corp. (WDC) since the end of November when I wrote that "WDC has arrived at the moment of truth, so to speak. Prices are trading softer Wednesday morning and we will see if the 200-day moving average line will again act as support. The risk becomes clear -- two consecutive closes below the 200-day average line would tell me to reduce my long exposure."

WDC declined into early December. Prices traded sideways into late February and then made a brief upside surge that was quickly reversed. WDC moved steadily lower to early September where it is starting to look more positive. Let's explore the charts and indicators on this stock discussed by Jim Cramer Wednesday night on Mad Money.

In the daily bar chart of WDC, below, we can see some improvement in the indicators. Prices are still below the declining 50-day moving average line and perhaps too far below the declining 200-day line. The daily On-Balance-Volume (OBV) line made a low in early September and has not made a new low since. It is early but this could be a sign that the selling pressure is over for the most part. The pace of volume looks heavy from early August suggesting that aggressive selling was meet with aggressive buying.

In the bottom panel is the 12-day momentum study, which shows a higher low from August to September. This is a bullish divergence when compared to the lower lows in price. It tells us that the pace of the decline has slowed. This can foreshadow a price recovery.

In the weekly bar chart of WDC, below, we see a bearish alignment of our to-go indicators. Prices are below the declining 40-week moving average line. The weekly OBV line has been declining the past seven months.

The weekly MACD oscillator has been below the zero line for months but has recently narrowed. A crossover to the upside would be a signal to cover shorts.

In this Point and Figure chart of WDC, below, we can see that prices reached a longer-term downside price target.

Bottom-line strategy: WDC is still in a downtrend but the daily chart where things show up first is telling us that the decline could be nearing an end. Shorts should cover on weakness and bulls should wait for more basing action.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | Stocks

More from Stocks

Bearish Bets: 3 Stocks You Should Think About Shorting This Week

Bob Lang
Jun 26, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

For Smith & Wesson, Load, Cock and Fire Another Round

Bret Jensen
Jun 26, 2022 7:30 AM EDT

Here's how to aim for this gunmaker once more with a covered-call play.

Does the Big Bounce Mean More to Come? Let's See What Drove the Move

James "Rev Shark" DePorre
Jun 24, 2022 4:42 PM EDT

Much of the rally can be attributed to structural reasons, not fundamentals, technicals, or even macro ones.

MongoDB Is Poised for a Rally

Bruce Kamich
Jun 24, 2022 2:15 PM EDT

Here's our initial upside price target for MDB which provides a general purpose database platform.

See That Down the Road? It's the Big 'Green' Bubble, Ready to Pop

Jim Collins
Jun 24, 2022 1:30 PM EDT

Environmental, social, and corporate governance has created a monster and gullible investors should hit the brakes on their EVs and run from the Washington technocrats while they have the chance.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:10 AM EDT PAUL PRICE

    More Insider Buying in American Woodmark (AMWD)

    American Woodmark , which I've discussed here fr...
  • 08:55 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 10 personality traits of successful traders an...
  • 12:08 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10

    As a Portfolio Name Agrees to a Merger, Here's Our...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

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.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login