WDC closes lower for the 2nd day in a row
Western Digital Corporation (WDC) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, WDC finished the week 8.19% higher at 42.42 after edging lower $0.27 (-0.63%) today, strongly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (WDC as at May 22, 2020):
Friday's trading range has been $0.94 (2.19%), that's far below the last trading month's daily average range of $1.86. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for WDC. Prices continued to consolidate within a tight trading range between 41.95 and 44.25 where it has been caught now for the last three trading days.
Notwithstanding a strong opening Western Digital closed below the previous day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical resistance level at 43.13 (R1). After having been unable to move lower than 41.95 in the prior session, the stock found buyers again around the same price level today at 41.95. The last time this happened on May 6th, WDC gained 3.00% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the nearby swing high at 44.25 where further buy stops could get activated. As prices are trading close to May's high at 44.30, upside momentum might accelerate should the share mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Western Digital. Out of 517 times, WDC closed higher 50.68% 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 52.42% with an average market move of 0.58%.