Western Digital Surges 12.63% In 3-Day Rally As Technicals Signal Bullish Momentum

Opening Paragraph
Western Digital (WDC) closed at $90.49, gaining 5.22% in the latest session and extending its rally to three consecutive days, culminating in a 12.63% surge over this period. This momentum occurs against a backdrop of significant volatility throughout the past year, which included a sharp decline to the mid-$30s in April 2025 and a robust recovery toward recent highs. The following technical analysis evaluates key indicators to assess the sustainability of this upward trajectory and identify critical levels.
Candlestick Theory
Recent sessions display a strong bullish candlestick pattern, characterized by three successive long green bodies (September 2–4) confirming buyer dominance. The latest candle closed near its high ($90.49 vs. intraday high of $90.9), suggesting conviction. Key support resides near $83.34 (September 3 low), aligning with the psychological $85 level. Resistance is evident at $90.9 (September 4 high), with a break potentially targeting $95. The earlier hammer pattern near $41.83 (April 30) marked a major trend reversal, establishing foundational support.
Moving Average Theory
The 50-day MA ($74.15 calculated) now acts as dynamic support, with the price trading well above all major moving averages. A golden cross materialized in late August as the 50-day MA surpassed the 200-day MA ($63.80), confirming a long-term bullish trend. The ascending order of MAs (50 > 100 > 200) signals a robust uptrend. Near-term pullbacks may find support at the 50-day MA, while sustained trading above the 20-day MA ($81.20) reinforces short-term bullishness.
MACD & KDJ Indicators
The MACD histogram shows expanding bullish momentum (rising bars above the signal line), supported by the MACD line’s upward trajectory. KDJ registers an overbought signal (K: 86, D: 78, J: 102), though such conditions can persist during strong trends. No bearish divergence is apparent; however, the overextended KDJ suggests potential short-term consolidation. MACD’s persistence in positive territory aligns with the current trend strength but warrants monitoring for histogram flattening.
Bollinger Bands
Volatility expansion is evident as the price touches the upper band ($89.80), reflecting strong upside momentum. Band width has widened after a contraction in late August, supporting breakout validity. A close above the upper band may signal short-term overextension, but the absence of reversal candlesticks diminishes immediate bearish implications. The middle band ($81.50) now serves as primary support.
Volume-Price Relationship
Volume surged 11% on September 4 versus the prior session, validating the price breakout. The rally’s third day also saw above-average volume (13.54M shares), reinforcing buyer commitment. Notably, the July 31 spike (24.01M shares) catalyzed the recovery phase, establishing high-volume support near $73.25. Declining volume during pullbacks (e.g., August 29) signals limited sell pressure.
Relative Strength Index (RSI)
The 14-day RSI (71.3) approaches overbought territory (>70), suggesting potential near-term exhaustion. However, RSI can remain elevated in strong trends, and no divergence exists versus price. A retracement toward 60 could offer healthier entry points. Historical parallels exist with the RSI peak at 75 during the April rebound, which preceded consolidation but not an immediate reversal.
Fibonacci Retracement
Applying Fibonacci to the April 3 peak ($38.9) and April 30 trough ($30.54) reveals key levels: the 61.8% retracement ($36.50) was breached in May, and the current rally approaches the 127.2% extension near $93. From the June 13 low ($55.7), the 161.8% extension aligns with $95.50. These levels may act as profit-taking zones.
Confluence Points & Divergences
Confluence supports exist between the 50-day MA ($74.15), horizontal support ($83.34), and Bollinger mid-band ($81.50). Resistance confluence emerges near $95–$96 (Fibonacci extension + psychological level). Divergences are absent between price and momentum oscillators (MACD, RSI, KDJ), reinforcing trend consistency. The primary caution stems from overbought readings in RSI and KDJ coinciding with Fibonacci resistance, which may trigger consolidation.
Conclusion
Western Digital exhibits robust bullish momentum, validated by volume-supported breakouts, moving average alignment, and strong MACD readings. While overbought oscillators and proximity to Fibonacci resistance ($93–$96) suggest potential near-term consolidation, the overall trend structure remains constructive. A sustained close above $91 could open the path toward $95.50. Traders should monitor volume trends and RSI for exhaustion signals, with key support holding near $83–$85.