Shares of Seagate Technologies PLC (STX) has been moving quickly up the relative strength matrix in the SIA S&P 500 Index Report and currently holds position #14. A review of the point and figure chart for STX shows a recent quadruple top breakout as the share price advanced to $112.34, with current trading near $126.07. Based on point and figure vertical counts using two different poles, new resistance might appear near the psychological level of $200. A closer look at the SIA chart could suggest resistance targets at $201.75 and $211.83, depending on which pole is referenced.
Support, on the other hand, might begin at the 3-box reversal level near $106.99. Additional support could be seen around $88.02, followed by a broader zone between $72.42 and $68.97. Seagate is part of the SIA Computer Hardware sector, which has improved by 13 positions over the past month and currently stands as the top gaining sector in the SIA rankings. The SIA SMAX score, which offers a short-term measure of relative strength compared to a group of alternative asset classes, gives a perfect score of 10 out of 10.
A review of a monthly candlestick chart, where each bar reflects one month of trading, shows a strong breakout over the past three months. Buyers appear to be in control of the supply and demand relationship. While the strength of the move is notable, a Bollinger Bands overlay reveals that the share price is currently extended beyond two standard deviations, also known as two sigmas. Historical examples marked by arrows on the chart suggest that similar extensions in the past were followed by a reversion to the mean after periods of rapid price movement.
Bollinger Bands, developed by John Bollinger, serve as a technical tool to assess overbought or oversold conditions and to measure price volatility. The bands consist of a middle line, typically a 20-day simple moving average, with upper and lower bands set two standard deviations above and below the average. Statistically, about 95% of price action occurs within these bands. A move beyond either band could indicate an unusual event and might suggest a pending reversal toward the average. However, in strong trends, the price might continue to "ride the band," meaning it stays near the upper or lower boundary for extended periods. This behavior could signal trend strength rather than an imminent reversal.
In terms of technology, Seagate's HAMR (Heat-Assisted Magnetic Recording) provides a significant advantage by allowing much higher data densities than traditional hard drives. This innovation supports drives with 20TB and beyond, which could be essential for data centers and video surveillance systems that require reliable and cost-efficient storage solutions. HAMR-based drives might offer more capacity without increasing power usage or physical space, making them well-suited for managing large volumes of video, backups, and analytics data at scale.
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