Western Digital Looks Toppy
Western Digital (WDC) is beginning to look quite toppy. The stock has been working through a powerful bull run over the last eight weeks, and now it is much overextended. WDC has surged 50% from its June/July lows and more than 30% since a strong fourth-quarter report in late July. In August, the gains have been very steady despite a noticeable contraction in volume. Shares this week have reached a key level, the April 26 spike highs, while momentum has begun to fade.Western Digital (WDC) Source: TradeStation View Chart » View in New Window »
In early June, WDC reached a severely oversold level. The stock had suffered a major breakdown the day after hitting fresh 2012 highs. The ugly breakdown gap on April 27 left behind a spike high just above $44.00. WDC began a steep decline two week later as the weight of its earnings-inspired flush took its toll. By early June, after a 35% collapse, the stock began to build a base. It had reached a major support area, well below its 200-day moving average. While being deeply oversold, WDC was able to bottom and selling pressure eased considerably as the month progressed. July brought about a change in character as bulls put money to work. The stock recovered nicely heading into its fourth-quarter report after leaving behind a healthy six-week bottom. WDC's ramp on July 26 carried a ton of upside momentum....120 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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