It's been a rough Tuesday for tech investors, and Western Digital Corp. (WDC) is feeling the heat. The storage giant's stock fell nearly 7% as the broader market took a risk-off turn. The Nasdaq dropped 1.74%, and the S&P 500 slipped 0.65%, but the pain was especially acute in the storage and memory chip space.
Western Digital wasn't alone in the selloff. Peers like Seagate Technology Holdings PLC (STX), Sandisk Corp. (SNDK), Micron Technology Inc. (MU), and SK hynix Inc. (SKHY) all traded lower. The group moved in sympathy with SK hynix after the South Korean government denied a report that it was discussing a semiconductor project as the first investment under its $350 billion commitment to the U.S. Adding to the gloom, a bond market selloff also weighed on sentiment.
Western Digital's Longer-Term Trend
Despite Tuesday's stumble, it's worth stepping back to see the bigger picture. Western Digital is still up a whopping 550% over the past 12 months. That's not a typo. The stock has been on a tear, and even after this pullback, it remains well above its 200-day simple moving average of $353.55.
However, the near-term picture is a bit more mixed. The stock is trading about 10% below its 50-day SMA of $551.30 and slightly below its 20-day SMA of $498.75. The 20-day SMA sitting below the 50-day SMA is a classic sign of short-term weakness. But here's the silver lining: the 50-day SMA is still above the 200-day SMA, which keeps the longer-term bullish trend intact.
The relative strength index (RSI) is at 48.89, which suggests neutral momentum. Not overbought, not oversold, just kind of in the middle. For traders, resistance is near $576.50, while support sits around $430.50.
Analyst Outlook
What do the folks on Wall Street think? The stock carries a Buy consensus rating, with an average price target of $649.79. That's a decent upside from current levels, even after the recent run.
Recent analyst moves have been a mixed bag. Citigroup maintained a Buy rating on Aug. 7 but trimmed its price target to $740. TD Cowen also kept a Buy and raised its target to $540 on Aug. 6. Meanwhile, UBS stayed at Neutral and lowered its target to $525 the same day. So, the bulls are still in charge, but some are getting a bit more cautious.
WDC Price Action
At the time of publication Tuesday, Western Digital shares were down 6.80% at $499.55, according to market data. It's a rough day, but for long-term investors, the story is still about that massive run and whether the momentum can continue.
