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Western Digital (WDC) is one stock I have been following since the back end of last year when it was trading at $47.27 and one which looked set to deliver some excellent gains over the following months, something we have indeed seen as it trades at $68.07 at the start of the week.

The key price action on the weekly chart was the breakout from congestion around the $50 per share price and which came in late January on good volume and propelled the price up to $55 per share. Since then the stock has marched steadily upwards until the last three weeks when we have seen a pause point and congestion build, first with two Doji candles, followed by last week’s significant candle.

In other words, whilst overall the price closed lower, the candle’s deep wick to the lower body and high volume suggests the market operators are stepping in here, buying in the reversal with the upwards path set to continue in the medium term. A move through $70 per share and beyond then propels this stock into a low volume node on the volume point of control histogram, and the prospect of further gains.