Western Digital Is Showing Independent Strength -- Use It to Your Advantage

 | Nov 14, 2017 | 11:14 AM EST
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We recently reviewed Western Digital Corp. (WDC) , and gave a strategy that allowed for two outcomes: "If you are bullish on WDC, I would look to buy strength above $91 and $95 but if you think WDC is vulnerable I would wait for a close below $80 before taking action." Let's see if a few more days of trading can sharpen our outlook.

In this updated daily bar chart of WDC, below, we can see that prices have moved up toward our $91 "trigger" level noted above. This strength looks like it will follow through on the upside. Prices are above the flat 50-day moving average line and above the rising 200-day line following a number of successful tests of the line in recent weeks.

The daily On-Balance-Volume (OBV) line looks like it is trying to move higher signaling more aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator has moved above the zero line to an outright go long signal.

In this weekly bar chart of WDC, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has been steady the past five weeks and the MACD oscillator looks like it is close to a crossover and bullish buy signal.

In this Point and Figure chart of WDC, below, we can see that a rally to $91.77 will be a bullish breakout on this chart and open the way to a potential rally to $100.24.

Bottom line: The broad market averages are weaker today but WDC is showing independent strength this morning. I would reiterate the strategy of going long WDC on strength above $91 and $95.

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