Double Bottom

Double Bottom

August 19, 2019 Off By Chuck

After hitting $100 share in March of last year, Western Digital’s stock, WDC, fell on hard times as it declined more than 65%, bottoming 10 months later in December.  Since then it has made two higher highs and one higher low and sits just under an important past area of resistance. You can see in the upper pane RSI momentum now resides in the bullish zone while price is above the bullishly aligned moving averages (price > 50dma >200dma). While not perfect, the recent 11+ month consolidation formed a double bottom which, if plays out, has an upside target at T1, a 40+% gain from a breakout. I do want to point out the volume patterns are confirming a potential move higher as we are seeing the large volume (bottom pane) spikes shifting from predominantly red (institutional selling) to green (institutional buying)

Of course, being a technology stock (hard drives), this opportunity will have little to no chance of ever hitting its upside target if either an escalation or no change to the current US-China trade standoff happens. But, any positive resolution sets WDC’s stock as an attractive opportunity with healthy gain potential.