WDC closes within prior day's range
Western Digital Corporation (WDC) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, WDC finished the week 7.72% higher at 40.03 after gaining $0.22 (0.55%) today, outperforming the Nasdaq 100 (-0.3%). Today's close at 40.03 marks the highest recorded closing price since December 12, 2018. Trading up to $0.73 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WDC as at Jan 11, 2019):
Friday's trading range has been $1.70 (4.3%), that's slightly below the last trading month's daily average range of $1.96. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for WDC.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 38.83 earlier during the day, the share bounced off the key technical support level at 38.87 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on January 2nd, WDC actually lost -6.82% on the following trading day. After having been unable to move lower than 38.88 in the prior session, Western Digital found buyers again around the same price level today at 38.83.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 41.59 where further buy stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Western Digital. Out of 416 times, WDC closed higher 56.49% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.25% with an average market move of 0.75%.