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

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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