Seagate Technology (STX) rolled over for several months from February and a decline took hold in August through October. It now looks like prices are attractive enough for buyers to reenter. Let's see if we should join them.
In this daily bar chart of STX, below, we can see that prices tested the declining 50-day moving average line in November and the beginning of December. STX has not closed above the line but that may be a matter of time as the bulk of the gains from the early November rally have been maintained.
The 200-day moving average line is bearish but in the short-run I am not worried about it.
The daily On-Balance-Volume (OBV) line shows a rise in November to almost a new high suggesting that buyers of STX have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal in early November and could cross the zero line soon for an outright go long signal.
In this weekly bar chart of STX, below, we get to see the price action in a different light. This chart shows the 2018 pullback as a retracement in a three-year uptrend. Prices are below the declining 40-week moving average line.
The weekly OBV line shows a slow decline this year until October and then a small rise.
The weekly MACD oscillator has narrowed and is now close to a cover shorts buy signal.
In this Point and Figure chart of STX, below, we can see an upside price target of $64 being projected. A rally to $47 will help.
Bottom line strategy: Aggressive traders could go long STX on strength above $46 and above $47. Risk below $39.
