Western Digital Trading above 20-Day Moving Averages in October 2015
Western Digital, NetApp, and the Troubled Technology Subsector
Shareholder returns and stock trends
As of October 2, 2015, Western Digital Corporation (WDC) generated investor returns of -16.73% in the trailing 12-month period and -0.72% in the trailing one-month period. In comparison, the company generated 34% in 2014 and -28.24% YTD (year-to-date). The firm’s share price increased by 12.73% in the trailing five-day period.
In comparison, SanDisk Corporation (SNDK) and Seagate Technology (STX)—peer companies in the Technology, Hardware, Storage, and Peripherals subsector—generated returns of 12.76% and -10.43%, respectively, in the trailing one-month period.
Moving averages
On October 2, 2015, Western Digital closed the trading day at $79.44. Based on this figure, here’s how the stock fared in terms of its moving averages:
5.86% below its 100-day moving average of $84.09
0.44% below its 50-day moving average of $79.81
2.85% above its 20-day moving average of $77.16
MACD and relative strength index
A company’s MACD (moving average convergence divergence) is the difference between its short-term and long-term moving averages. On October 2, 2015, Western Digital’s 14-day MACD was -1.92. This negative figure indicates a downward trading trend.
The company’s 14-day RSI (relative strength index) was 54, which shows that the stock is neither overbought nor oversold. Generally, if a company’s RSI is above 70, it indicates its stock is overbought. An RSI figure of below 30 suggests that a company’s stock has been oversold.
Analyst recommendations
Out of 29 analysts covering Western Digital’s stock, 23 have issued a “buy” recommendation, one has issued a “sell” recommendation, and five have recommended a “hold.” The analyst stock price target for the firm is $97.68, with a median target estimate of $96. This means that Western Digital is trading at a discount of 17% to median analyst estimates.
Western Digital makes up 0.50% of the Technology Select Sector SPDR ETF (XLK) and 0.35% of the Powershares QQQ ETF (QQQ). In the next part of this series, we’ll shift focus and look at the 1Q16 results of NetApp (NTAP), one of Western Digital’s industry peers.
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