WDC closes higher for the 2nd day in a row
Western Digital Corporation (WDC) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, WDC ended the month -2.38% lower at 43.10 after gaining $0.34 (0.8%) today, underperforming the Nasdaq 100 (1.78%). Trading up to $0.88 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (WDC as at Jul 31, 2020):
Friday's trading range has been $1.11 (2.59%), that's slightly below the last trading month's daily average range of $1.40. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for WDC.
One bullish candlestick pattern matches today's price action, the Takuri Line. The last time a Takuri Line showed up on July 10th, WDC actually lost -1.09% on the following trading day.
Unable to break through the key technical resistance level at 43.13 (R1), Western Digital closed below it after spiking up to 43.14 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 43.83 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 41.39 where further sell stops could get triggered. As prices are trading close to July's low at 40.57, downside momentum might accelerate should the market mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Western Digital. Out of 51 times, WDC closed lower 54.90% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 62.75% with an average market move of -2.59%.