It's a good day to be in the memory business. Western Digital Corp. (WDC) shares surged about 13% in Thursday's premarket session, and the reason is simple: Micron Technology Inc. (MU) just delivered a quarter that made everyone feel a lot better about the memory market.

Micron reported fiscal third-quarter adjusted earnings of $25.11 per share on revenue of $41.46 billion. That alone would have been enough to get people talking, but the company also gave a fiscal fourth-quarter forecast that blew past expectations: adjusted earnings of about $31 per share on roughly $50 billion in revenue. That kind of outlook doesn't just make Micron look good — it lifts the entire sector, including Western Digital and SanDisk Corp. (SNDK).

A broader risk-on mood also helped. S&P 500 futures were up 0.7% before the opening bell, so investors were already feeling optimistic. But the memory rally was the clear leader of the pack.

The Technical Picture: Still Bullish

Western Digital's stock has been on a tear, and the technicals suggest the trend is still your friend. The stock is trading about 22% above its 20-day simple moving average of $592.54, 44.5% above its 50-day average of $500.30, and a whopping 162.9% above its 200-day average of $275.00. That's a lot of distance, but it's all in the right direction.

The moving averages themselves are stacked in a classic bullish pattern: the 20-day is above the 50-day, which is above the 200-day. That's the kind of alignment that makes trend-followers smile. Momentum indicators are also constructive — the MACD is above its signal line, and the histogram is positive, suggesting buying pressure is building.

The next big hurdle is the 52-week high of $799.87. If the stock can break through that, there's not much overhead resistance until you start looking at all-time highs. On the downside, initial support sits near the 20-day moving average at $592.54. That's a long way from current levels, but it's a level to watch if the rally stalls.

Earnings and Analyst Outlook

Western Digital is expected to report its own quarterly results on or around July 29. Wall Street is looking for earnings of $3.27 per share, up from $1.66 a year earlier, on revenue of $3.70 billion, compared with $2.60 billion in the prior-year quarter. That's a nice jump, and it reflects the improving memory cycle.

The stock trades at about 38.5 times earnings, which isn't cheap, but it carries a consensus Buy rating. Analysts have been raising their price targets recently: Morgan Stanley and JPMorgan both lifted their forecasts to $650, while Mizuho went to $685 earlier this month. Those targets are below the current premarket price of $726, so we might see some upward revisions soon.

What the Data Says

According to market data, Western Digital scores extremely high on Momentum at 99.71 and Quality at 97.9. That reflects strong price performance and solid fundamentals. But the stock scores lower on Value at 4.96 and Growth at 14.77, which suggests that investors have already priced in a lot of the expected improvement in the storage cycle. In other words, the easy money might already be made, but the trend is still strong.

ETF Exposure

If you want to play the memory theme without picking individual stocks, Western Digital is a notable holding in several exchange-traded funds, including the Roundhill Memory ETF (DRAM), the Castellan Targeted Equity ETF (CTEF), and the iShares Large Cap Value Active ETF (BLCV). Changes in fund flows into these ETFs could influence demand for the stock.

Price Action

As of premarket trading Thursday, Western Digital shares were up 12.76% at $726.00. The memory rally is alive and well, and Micron's quarter gave it a fresh jolt of energy. Whether Western Digital can sustain the momentum into its own earnings report is the next big question.