Western Digital Rises 4.17% on Bullish Engulfing Pattern and MACD Golden Cross

Western Digital (WDC) closed at $105.15 on 2025-09-18, surging 4.17% from the prior session’s $100.94. This sharp reversal suggests a potential bullish pivot, supported by a bullish engulfing pattern on the candlestick chart. Key support levels appear at $99.72 (2025-09-17 low) and $97.66 (2025-09-12 close), while resistance is likely clustered between $102.39 (2025-09-15 close) and $103.09 (2025-09-16 close). The price action indicates strong buying pressure following a recent pullback, with the 50-day and 100-day moving averages likely in alignment above the 200-day MA, confirming a multi-timeframe uptrend. A crossover of the 50-day MA above the 100-day MA could further validate the bullish momentum.

The MACD (12,26,9) shows a golden cross, with the histogram expanding to the upside, aligning with the recent price surge. The KDJ (stochastic oscillator) suggests overbought conditions, with the %K line approaching 80, though divergence is not yet evident. Bollinger Bands are widening after a period of contraction, with the price currently near the upper band, signaling heightened volatility and potential continuation of the upward move. Trading volume surged to 10,389,065 shares on the rally, significantly outpacing the previous session’s 8,787,619, which validates the strength of the price breakout.

The RSI (14) is likely above 70, indicating overbought territory, but given the sustained upward momentum, this may not yet signal a reversal. Fibonacci retracement levels derived from the recent high of $106.11 and low of $99.72 suggest critical support at 61.8% ($100.20) and 38.2% ($102.50). A break below the 61.8% level could trigger a retest of the $97.66 support, while a hold above the 38.2% level would reinforce the bullish bias.

Backtest Hypothesis

The backtest results underscore the efficacy of a MACD-based strategy for WDC. A golden cross trigger with a 10-day holding period generated a 69.31% return, outperforming the benchmark’s 45.10% and achieving a 15.85% CAGR. The zero maximum drawdown and Sharpe ratio of 0.61 highlight the strategy’s robust risk-adjusted performance. This aligns with the current technical setup, where the MACD’s bullish signal and strong volume confirm the validity of the trend. However, the absence of a drawdown in the backtest may reflect the limited data window or specific market conditions during the tested period.