Western Digital Stock Surges 4.99% to $86 Amid Bullish Technical Signals

Candlestick Theory
Western Digital's recent price action displays a robust bullish engulfing pattern on September 3, 2025, where a 4.99% advance (closing at $86) fully eclipsed the prior session’s 1.95% gain. This follows a hammer formation on August 25, 2025 (low: $76.7, close: $79.22), which signaled rejection of lower prices near the $75–$77 support zone. The $86 level now acts as immediate resistance, aligned with the yearly high. Conversely, $81.90–$82.04 (August 28–29 consolidation) provides short-term support, while the critical long-term floor rests at $74.50–$74.66—a pivotal level tested and held twice in late August 2025. A bearish divergence would materialize if the price fails to sustain above $86 on declining volume.
Moving Average Theory
The 50-day moving average (SMA50 = $74.20) exhibits a steep upward slope, accelerating above the moderately rising 100-day SMA ($68.90), confirming strengthening short-term momentum. The current price ($86) trades 15.9% above the SMA50, signaling extended bullish sentiment. However, the absence of a 200-day SMA (due to the 149-day dataset) limits long-term context. Golden crosses are evident as the SMA50 surged above the SMA100 in mid-July 2025, reinforcing the bullish bias. Near-term caution is warranted as the widening gap between price and SMA50 may precede a consolidation to reconcile the divergence.
MACD & KDJ Indicators
MACD (12,26,9) shows a bullish crossover on August 27, 2025, with the MACD line (1.85) climbing above the signal line (1.72) and the histogram turning positive. Concurrently, KDJ reveals overbought conditions: %K (89) and %D (84) peaked above 80 on September 3, though %J (99) signals extreme bullish momentum. While MACD supports continuation, KDJ’s overbought state and potential bearish divergence—where price hits new highs while %K plateaus—suggest near-term exhaustion. A KDJ bearish crossover (%K dipping below %D) would warn of a pullback toward $81.90 support.
Bollinger Bands
Bollinger Bands (20-day, 2σ) contracted sharply in late August 2025, with bandwidth narrowing to $4.50 (vs. $5.30 monthly average), indicating low volatility preceding the 7.05% two-day surge. The breakout above the upper band (September 3 close: $86 vs. upper band: $83.80) signals overbought territory and a potential mean-reversion setup. Historically, such deviations resolved either through sideways consolidation or retracements to the middle band ($79.50). Band expansion now underway suggests volatile price discovery, with $83.80 acting as immediate support-turned-resistance.
Volume-Price Relationship
The September 3 rally recorded 11.94M shares traded—more than double the 50-day average volume (5.42M)—validating buyer conviction. This volume surge mirrors the July 31, 2025, breakout (24.01M shares on a 10.16% gain), which ignited the current uptrend. However, the preceding rally days (August 25–28) saw below-average volume, questioning sustainability. Bearish volume divergence would emerge if advances persist on shrinking turnover. The volume-weighted average price (VWAP) anchors near $79.00, providing dynamic support.
Relative Strength Index (RSI)
RSI(14) spiked to 73 on September 3, nearing overbought territory (>70) but lacking a decisive breakout. While this reflects strong momentum, RSI’s position below its July 31 high (79)—despite price setting new highs—creates a bearish divergence, implying weakening upward thrust. A break above 75 could prolong gains, though the divergence warrants vigilance for reversal signals. In isolation, RSI does not yet flash acute overbought warnings but aligns with other indicators (KDJ) to caution against chasing extensions.
Fibonacci Retracement
Applying Fibonacci to the dominant uptrend from April 14, 2025, low ($35.82) to the September 3 high ($86) yields key retracement supports: 23.6% ($74.15), 38.2% ($66.83), and 50% ($60.91). The recent August 21, 2025, low ($74.66) precisely bounced off the 23.6% level ($74.15), underscoring its technical significance. For the near-term swing (August 21 low: $74.66 to September 3 high: $86), the 23.6% retracement ($81.95) aligns with August 29–28 congestion ($80.34–$82.04), creating a high-confidence support confluence. A sustained break below $81.95 would expose the 38.2% level ($79.44).
Confluence and Divergence Summary
Confluence at $74.15–$74.66 (23.6% Fibonacci, hammer candlestick, and VWAP) validates it as a major support zone. Bullish agreement appears in the MACD crossover, volume-backed breakout, and golden cross moving averages. However, divergences include bearish RSI/price action alongside overbought KDJ and Bollinger Band extensions. This juxtaposition suggests continued upside momentum is probable short-term, but a pullback toward $81.90–$82.04 or $79.44–$79.50 may materialize to alleviate overbought pressures. A decisive close above $86 would signal extended gains targeting $90.