Hard drive manufacturer Western Digital (Nasdaq: WDC) has been trending lower for over eight months now and the stock has formed a trend channel around the cycles. The upper rail of the channel is in close proximity to the stock’s 50-day moving average and that could make it even more difficult for the stock to break out of the down trend.
The stock peaked back at $104.80 back on March 16 before falling to a recent low of $40.58. That is a drop of 61.3% from the high to the low. For you Fibonacci fans, that is close to the Fibonacci retracement of 61.8%.
The stock went through a similar drop from December ’14 through May ’16. During the selloff the stock dropped from $102.53 to $32.59. After hitting that low in 2016, the stock rallied to the all-time in March.
The fundamentals are a bit of a mixed picture for Western Digital. Earnings have been declining recently with the most recent quarter showing a drop of 15%. Analysts expect the earnings to decline by 51% for the year as a whole.
On the other hand, the profitability measurements are really good. The return on equity is currently at 39.4% and the profit margin is at 23.2%.
It’s hard to tell how much further the stock could fall. The low from 2016 could come in as support, but that is another 28.4% drop from where the stock closed on Thursday.
WDC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 35 cases where WDC's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 01, 2024. You may want to consider a long position or call options on WDC as a result. In of 92 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where WDC advanced for three days, in of 313 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 229 cases where WDC Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for WDC moved out of overbought territory on April 12, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 31 similar instances where the indicator moved out of overbought territory. In of the 31 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The Moving Average Convergence Divergence Histogram (MACD) for WDC turned negative on April 15, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WDC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. WDC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock slightly better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.293) is normal, around the industry mean (6.084). P/E Ratio (15.244) is within average values for comparable stocks, (63.089). WDC's Projected Growth (PEG Ratio) (490.332) is very high in comparison to the industry average of (55.962). WDC has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.034). P/S Ratio (2.023) is also within normal values, averaging (12.086).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a hard drive manufacturer
Industry ComputerPeripherals