Western Digital Corp (NASDAQ:WDC) — This manufacturer and designer of hard-disk drives for personal computing was last reviewed by me on Sept. 19 as a buy at $55 with a target at $65. Standard & Poor’s forecasts sales in fiscal year 2017 (Jun.) to rise 40%, a benefit from the acquisition of SanDisk last May. Flash memory demand should also improve prior to the next generation of mobile devices, strong data growth, and the acceptance of cloud computing and solid-state drives.
Greater Windows 10 enterprise development is expected to aid PC/hard disk shipments in 2017. Thus S&P has raised their EPS estimate for FY 2017 to $6.97, up from FY ‘16’s $1.06, and they forecast earnings of $8.25 in FY 2018. They also raised their price target to $80 from $70.
The Head-and-Shoulders breakout in September, coupled with a Golden Cross and a high-volume break-away-gap, launched WDC stock into a bull channel with the price line fluctuating around the green 20-day moving average now at $70.22.
Support is at the bullish support line of the channel, and below that the blue 50-day moving average line at about $65.50.
Lately, volume (Buy & Sell) has fallen below the average line, but even without the support of high buying, the stock broke to a new annual high at $73.47. Based on the strong technical and fundamental outlook for WDC, it should continue to be held by investors and bought by traders at $74 for a break to $85 for a proposed return of over 14%.
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