Don't Ignore This Chart!

Is This Data Storage Company Ready For A Breakout?

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There's a potential bottoming reverse head & shoulders pattern in play on Western Digital's (WDC) three year weekly chart as it attempts to clear its downtrend on its SCTR.  All of this comes on the heels of printing a positive divergence on its MACD.  This alone would have me looking for a 50 week SMA test, with that moving average currently residing at 56.70.  Here's the visual:

While we still have one more trading day left this week, currently the weekly candle is that of a dragonfly doji.  Considering it marks a potential reverse right shoulder and is accompanied by heavy volume, I believe the odds are increasing that WDC will eventually break above neckline resistance.  If it does, the measurement would be to roughly 65.00.  Technically, this is the best that WDC has looked since its breakdown in early 2015.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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