Western Digital Surges 5.96% on Power Inflow Signal: Is This the Start of a Bullish Rebound?

Summary
• Western Digital (WDC) surges 5.96% intraday to $198.86, driven by a Power Inflow signal
• DCF analysis suggests undervaluation at $232.95 intrinsic price
• Sector peers like Seagate (STX) rally 6.58%, reflecting broader data storage optimism
• Options chain shows heavy call buying at $190–$215 strikes, with $200 call (WDC20260116C200) seeing 1.027M turnover

Western Digital’s explosive 5.96% intraday rally has ignited investor curiosity, with the stock surging from $186.00 to $198.86 amid a Power Inflow signal. This move aligns with broader sector momentum, as data storage demand accelerates from AI and hyperscale growth. Technical indicators and options activity suggest a short-term bullish setup, though valuation debates persist.

Power Inflow Signal Ignites Short-Term Bullish Momentum
The Power Inflow signal triggered at $187.86 marked a pivotal shift in order flow, with institutional and retail buyers collectively driving WDC’s price to a post-alert high of $197.90. This signal, a proprietary indicator from TradePulse, highlights a surge in buying pressure after a 3% intraday decline. The rapid reversal underscores strong institutional interest and retail participation, fueled by optimism around Western Digital’s 23% year-over-year HDD shipment growth and HAMR technology adoption. The move aligns with broader sector trends, as hyperscale demand for high-capacity storage accelerates.

Data Storage Sector Rally: Seagate Leads as WDC Surges
The data storage sector is experiencing robust momentum, with Seagate Technology (STX) surging 6.58% and rival Pure Storage (PSTG) up 2.88%. Western Digital’s 5.96% rally reflects its strategic focus on high-capacity HDDs and HAMR technology, which position it to capitalize on AI-driven storage demand. While Seagate’s 6.58% gain highlights competitive dynamics, WDC’s valuation at 24.7x P/E (vs. sector average 22.5x) suggests potential for further outperformance if demand for enterprise storage outpaces expectations.

Options and ETF Strategy: Capitalizing on WDC’s Volatility
• MACD: 8.90 (above signal line 7.80), bullish crossover
• RSI: 59.56 (neutral, not overbought)
• Bollinger Bands: Price at $198.86 (above upper band $205.04), suggesting overextension
• 200D MA: $95.39 (far below current price), long-term bullish
• Key Levels: Support at $175.88 (30D MA), resistance at $205.04 (Bollinger upper band)

Western Digital’s technicals and options activity point to a short-term bullish setup. The stock is trading above its 200D MA and Bollinger upper band, with MACD indicating momentum. Call options at $200 and $202.5 strikes offer high leverage and liquidity. For aggressive bulls, the WDC20260116C200 (strike $200, leverage 27.17%, turnover 1.028M) and WDC20260116C202.5 (strike $202.5, leverage 32.73%, turnover 52.8K) stand out. These contracts offer high gamma (0.0214–0.0217) and theta (-0.9416–0.8842), ideal for capturing rapid price moves. A 5% upside to $208.80 would yield 115%–129% returns on these calls. Aggressive bulls may consider WDC20260116C200 into a bounce above $205.04.

Backtest Western Digital Stock Performance
The backtest of Western Digital Corporation (WDC) after an intraday surge of at least 6% from 2022 to the present shows favorable short-to-medium-term performance. The 3-day win rate is 55.34%, the 10-day win rate is 60.58%, and the 30-day win rate is 69.13%, indicating a higher probability of positive returns in the immediate aftermath of the surge. The maximum return during the backtest period was 13.29%, which occurred on day 59 after the surge, suggesting that there is potential for continued growth following a significant intraday gain.

Bullish Momentum Intact: Watch $205.04 Breakout for Extended Run
Western Digital’s 5.96% surge reflects strong short-term demand, driven by Power Inflow signals and sector tailwinds. Technicals and options activity suggest momentum remains intact, with a key resistance at $205.04 (Bollinger upper band). If this level breaks, the stock could target $221.23 (52W high). Sector leader Seagate’s 6.58% rally reinforces the bullish case. Investors should monitor the $200–$205 range for continuation signals. Aggressive traders may consider the WDC20260116C200 call if $205.04 is cleared.