Western Digital Jumps 5.42% to $112.41 on Bullish Technical Breakout

Western Digital (WDC) rose 5.42% in the last session, closing at $112.41, marking its third consecutive day of gains with a cumulative 11.36% increase over this period. This upward momentum occurred alongside elevated trading volumes, suggesting strong buyer conviction during the recent breakout phase.
Candlestick Theory
Recent price action reveals a bullish breakout pattern. The September 18th session formed a bullish engulfing candle near the $102 psychological support level, followed by three consecutive white candles culminating in a decisive close above the $110 resistance zone. Notably, the $107.21–$112.83 range in the latest session established a new support floor at $107 and resistance near $113, reinforced by the absence of upper wicks in the last two candles confirming buying pressure.
Moving Average Theory
The 50-day SMA ($84.70) crossed above the 200-day SMA ($67.20) in mid-August, establishing a "golden cross" that signaled a long-term trend reversal. Currently, the price trades significantly above all key SMAs (50-day: $100.10, 100-day: $90.75, 200-day: $74.40), confirming a strong bullish structure. The expanding gap between the 50-day and 200-day averages indicates accelerating upward momentum.
MACD & KDJ Indicators
MACD (12,26,9) shows sustained bullishness with the histogram printing consecutive ascending bars since September 4th, supported by a widening positive divergence between the MACD line and signal line. The KDJ oscillator (K:81, D:75, J:93) resides near overbought territory, with the J-line maintaining above 90 for two sessions – typically signaling strong momentum but warranting caution for potential pullback.
Bollinger Bands
The bands have expanded significantly (20-day SMA: $105.30, upper band: $118, lower: $92.60) after a volatility contraction in early September, reflecting accelerated directional movement. Price currently rides the upper band, a sign of strength, though historically such conditions have preceded short-term consolidations when RSI nears overbought.
Volume-Price Relationship
Volume surged 19% above average during the September 4th breakout ($90.49 close), confirming institutional participation. The three-day rally saw volume progressively increase, peaking at 9.67M shares in the latest session – a high-volume confirmation of the breakout. Notably, all major upswings since April were validated by volume spikes exceeding the 20-day average by >30%.
Relative Strength Index (RSI)
The 14-day RSI (72) approaches overbought territory after climbing from neutral (55) a week ago. While this suggests near-term exhaustion risk, the indicator’s "warning not warranty" nature must be contextualized – during strong trends, RSI can remain elevated for extended periods. Divergence would only materialize if prices make new highs while RSI fails to follow.
Fibonacci Retracement
Using the April low of $28.83 and September high of $113:
- The 61.8% retracement ($66.20) anchored the June consolidation
- The 50% level ($79.50) provided support throughout May
- Current price resides near the 78.6% retracement ($111.50), with a sustained close above this level opening the path to test the full 100% extension ($116.50)
Confluence occurs at $107–$110, where the 50% Fibonacci level, 20-day SMA, and previous swing highs converge – making it a critical support zone. A notable divergence exists between RSI nearing overbought and volume-backed price strength, suggesting near-term consolidation may precede further upside. While momentum remains probabilistically bullish, traders should monitor the $110 support and RSI behavior for sustainability confirmation.