Shares of WDC have fallen precipitously over the past several weeks from north of $100 to around $62-65. However, a look at the weekly chart shows this level to be significant support, as it's 61.8% retracement of the advance from the lows in 2016 to the highs this year. Furthermore, the dashed line shows that this level was also a significant level back in 2013, because it went on to double in price from that breakout point.
Also worth noting is that we formed a bullish hammer last week, and so far this week the bulls seem to have favor. I'd like to see another flush down to $62 to get the RSI in to oversold territory, and I believe we'll get it over the next few weeks.
Data storage is an obvious requirement for life in this day and age, so the threat of extinction seems unlikely. The main threat will be simply keeping up with evolving requirements better than competitors like STX, and to a lesser extent, MU.
I've began buying to accumulate a position, as I expect it to take time to materialize in to a rally. At current levels, you get a 3.1% dividend while you hold it. Plus, at 5.5x 2018's earnings estimates, it's not expensive on a P/E basis, and with a P/S (price/sales) ratio of 0.92, it's not expensive on that basis, either. In short, I like it for a long term play on the ever-growing data business, and now is the time to start buying.
Also worth noting is that we formed a bullish hammer last week, and so far this week the bulls seem to have favor. I'd like to see another flush down to $62 to get the RSI in to oversold territory, and I believe we'll get it over the next few weeks.
Data storage is an obvious requirement for life in this day and age, so the threat of extinction seems unlikely. The main threat will be simply keeping up with evolving requirements better than competitors like STX, and to a lesser extent, MU.
I've began buying to accumulate a position, as I expect it to take time to materialize in to a rally. At current levels, you get a 3.1% dividend while you hold it. Plus, at 5.5x 2018's earnings estimates, it's not expensive on a P/E basis, and with a P/S (price/sales) ratio of 0.92, it's not expensive on that basis, either. In short, I like it for a long term play on the ever-growing data business, and now is the time to start buying.