Watching Western Digital
Gary S. Morrow | Oct 19, 2020 12:10PM ET
Shares of Western Digital (NASDAQ:WDC) have been locked in a sideways pattern since an ugly post earnings flush back on Aug. 6. The stock has been trading inside the September range throughout all of this month. As a new week begins WDC is bumping up against a key overhead trendline (links July/Sept highs). We believe the odds of an upside breakout are very high. A close above $40.00 (October high) could spark quite a run.
We consider WDC a fairly low-risk buy at current levels. On the downside, a close back below $36.00 would violate last week’s low, as well as a scooping 50D MAV, sending a clear sign of more sideways trade to come. Considering the heavy damage WDC sustained following the last two earnings reports (-12%/-16%) expectations for an upside surprise are quite low. We view this as a positive.
Earnings are due Oct. 28 after the bell.
Note: We are long WDC in some managed accounts.
You can ready Gary S. Morrow's original post here .
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