Western Digital Now Developing Bullish Momentum

And here is another stock preparing to develop a bullish trend and once more a chart where levels are key. This time it’s WDC Western Digital (NASDAQ:).

WDC weekly

If we start with the volume point of control denoted with the yellow dashed line, this gives us the fulcrum of the market where volume and price have been in congestion for the longest period and hence have the greatest volume associated with it. However, what the VPOC also often produces, as it has done here, is to produce strong and well-developed levels of support and resistance as the market congests, and so gives us clear levels against which to benchmark breakouts and breakaways. Whilst one thick line denotes a strong level, two in a cluster are doubly important, strengthening such levels exponentially, and here we can see this in effect just below $45 per share with the red and blue dashed lines. This was a ceiling of resistance and a powerful one which was breached last week with the up spread candle as bullish momentum developed. So far this week we have seen this stock continue higher and with the volume-based resistance on the histogram falling away, and with only minor price based resistance ahead, we could see this stock return to the $70 per share level in the longer term.

What is also encouraging and adding weight to the bullish picture is the decline in the selling pressure which has been waning since August. Note how the selling is falling away on those weeks of down candles, and in areas which had seen heavy selling previously. Again a good sign the sellers have been absorbed and the market makers are now preparing a new campaign for this stock. Finally, note the trend monitor indicator for NinjaTrader has also transitioned to reflect this positive view.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

This site uses cookies to offer you a better browsing experience. By browsing this website, you agree to our use of cookies.