We looked at the charts and indicators for Seagate Technology plc (STX) earlier this month, and we reached a bullish conclusion and strategy, "Aggressive traders could position STX from the long side at current levels, risking a close below $32. Add to the long on strength above $40 and $44, looking for gains back to $50 and then possibly $70." Checking on the charts again a few weeks later we want to reiterate our bullish call. Let's review the latest bar charts to see why like the long side of STX.
In this daily bar chart of STX, below, we can see that prices rallied after our recommendation to go long at current levels in early November. Prices have closed above $40 and above the 200-day moving average line so I will assume that aggressive traders did some more buying of STX. Prices are still above the rising 50-day moving average line and we could see a bullish golden cross of the 50-day and 200-day averages in the near term.
The daily On-Balance-Volume (OBV) line continues to rise, as it has been since late January, telling us that buyers of STX have been more aggressive with heavier turnover seen on days when the stock has closed higher. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and may or may not cross to the downside for a take profits sell signal. It all depends on the future price action.
In this weekly bar chart of STX going back three years, below, we can see that prices are testing and likely to close above the downward sloping 40-week moving average line. Our supporting indicators are very bullish. The weekly OVB line is in a up move and the weekly MACD oscillator is nearly back up to the zero line for an outright go long signal.
In this Point and Figure chart, below, we can see that a trade at $40.99 will be a breakout from a triple top at $40.58. This should allow for a much more bullish price target probably in the $50 area.
Bottom line: Traders and investors who went long STX 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.