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Seagate Technology PLC - (STX) - March 8, 2023

In the Daily Stock Report, we often look at stocks which has climbed up through the yellow zone of their reports and have entered the green zone. Recent trading in data storage device producer Seagate Technology (STX) reminds investors that the Yellow Neutral Zone is an area of transition and that early stage recovery trends don’t always work out.

After spending most of a year in the Red Unfavored Zone of the SIA S&P 500 Index Report, Seagate climbed up into the yellow zone in January which looked encouraging at the time. In recent weeks, however, Seagate’s relative performance has weakened and the shares have dropped back down into the Red Zone, posting a loss of 9.9% for the time it was in the yellow zone.

Seagate finished yesterday in 257th place, down 6 positions on the day and down 44 spots in the last month.

Seagate Technology (STX) shares, which had looked promising after breaking out of a base back in January, have faltered in recent weeks. Last month, the shares ran into resistance near $72.50, an old support level, and since then, they have been under renewed distribution, dropping back under their 50 and 200-day moving averages.

A drop below $60.00 would confirm the start of a new downswing with next potential support at a previous breakout point near $55.00, then the $50.00 round number. Initial resistance on a rebound appears near $65.00 then $70.00.

The recovery rally in Seagate Technology (STX) which unfolded over January and February has faltered into March. A High Pole ran into resistance at a 45-degree downtrend line near $73.75 and the shares have since rolled down into a column of O's, starting a correction.

A decline below $60.50 would trigger a bearish High Pole warning. Support below there could potentially appear near $57.00, $49.60 or $47.70 based on previous column lows. Initial resistance on a bounce may emerge near $66.80, based on a 3-box reversal.

With a bearish SMAX score of 3, STX is exhibiting weakness against the asset classes.

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