WDC fundamentals are attractive due to rising EPS estimates and AI demand, but technicals show an unclear downtrend with key support at 425.

Now your last one is the the clear outperformer in terms of price action. We're talking about Western Digital up, you know, a measly 468% in the last 52 weeks, Jessica. So, take us through your thesis on Western Ditch.

Yeah, it's very interesting that it's the outperformer and as we're increasing in total debt to percentage of assets. So, it's interesting because that might relate to the pullback.

Um, their total debt as a percent of assets is about 8.6% slightly under. They have positive free cash flow quarter over- quarter growth of about 30%. They're really the key data point that caught my attention though is the EPS estimates over the past 30 days.

Those revisions are up over 10%. So even though the one-mon return is a little low, that to me is showing me that earning estimates are climbing. And that's what I call attractive valuation is I like to look at the price relative to the estimates and the delta differentiation rather than just a PE ratio altogether.

Let's look at the numerator and the the denominator if you will.

Um, we know AI is driving chipflation, quote unquote. There is surging memory demand, which is pushing those prices higher. So, I think if we pay attention to what's happening to Dell today, that's going to feed into what's happening with WTC as well, because that's accelerating purchases of PCs, service or uh storage systems, service services.

So, it's important to pay attention to that. But, it's the analyst estimates that are climbing, a continuation of that, but a continuation of demand as well.

All right, Kevin. So, let's look at this chart because obviously Western Digital has been an outperformer in the entirety of the market, but as Jessica highlighted, we've also seen a pullback in this name as well. So, walk us through the technical setup here.

Yeah, you're right. Uh 50% draw down from the 52- week high or the all-time high down to the low we made in August 6. Uh not a great move. Obviously, you hate giving up 50%, but the ledge at 425 short-term support does seem to be pretty notable.

And yet it's difficult for traders to be comfortable here because of the proximity to the 200 day moving average. It's a mere 57 beneath us at 425. So we have to pay attention to the fact we're 6 weeks below that downs sloping now 50-day moving average comes in today at about 520 or so.

But we've been below it like I said since July 15. And that's notable because we've attempted three separate times uh prior to this uh breakdown that we've seen to rally into the 50-day and try and get back above it and have failed each of those instances.

So 425 could be shortrun support. If not, then the potential exists to visit the 200 day around 370. Um beyond that though, the chart here is just telling us that we don't have a lot of clarity about the current range when we look at it on the daily right now. just the weakness associated with six weeks below the 50-day moving average.

Yeah. And it's it's just taking again into account technical analysis 101 stuff. After the the move to the upside, we broke down. Now, on this chart, we're using the 200 period moving average.

Again, it's a 90-day window, 4hour bars, but we broke it in early July here. So, if you were an intermediate term trader on the daily chart, you may not have seen this for another week.

But if you were watching it on the 90-day window using the 200 period moving average, we would have caught this maybe a a week earlier and we've basically been below that 200 period outside of a couple of uh one day above it here in mid August, but it's just been making lower highs and and granted matching lows at 425.

So, could we be holding up here? Sure. But I'd say that the trend is unclear outside of the fact that we've come into this in a downtrend and we're trying to consolidate. And so as much as we want to be bullish, when you come into a move of this nature so aggressively to the downside, it's doing so with the deep bearishness and that really puts the onus on price action.

And I think traders would be well reminded to uh take the approach that says, "Hey, make price dictate whether or not you're choosing to do something different here." uh because we just haven't seen it right yet.

Uh if we can get above 490, I think traders are going to be a little bit more willing to take on an opportunity, but uh in the near run here, 425 still remains a very important short-term area for support.

Yeah, right now at 45361, but with a 16% pullback over the past month.