Seagate stock analysis before Earnings, OCZ speculation

Rumors say that Seagate might provide a surprise with today’s Q4 2012 earnings report by announcing the acquisition of OCZ. Speculation about Seagate matching with OCZ has been around for quite few weeks and there is no better time to surprise the market other than the earnings season! Seagate consensus EPS of the 4th fiscal quarter is the highest ever predicted by analysts at $2.51. Seagate beat the estimates 3 months ago regarding the Q3 2012 earnings report, when they reported $2.64 earnings per share compared to $2.11 estimate. The rumors of OZC acquisition has also boosted OCZ stock price but I’m much more interested in the Fibonacci retracement of STX stock found at the monthly chart!

Technical analysis: Seagate stock

Seagate stock price has confirmed the 61.8% Fibonacci retracement level in 2010 and 2011 and the breakout above the resistance level of $21 was another proof of the long term uptrend that is developing. Thailand floods have affected many stocks of companies manufacturing hard disks in 2011. The past weeks though many of those companies reported their latest financial data and their shares skyrocketed, like the 30% surge of Western Digital (here’s my analysis of WDC stock before that). OCZ stock also printed new 3-month highs on Friday, although that was due to the acquisition speculation. OCZ earnings report back on July 10th wasn’t exactly the ideal one.


Going back to the Seagate monthly stock chart, we see that there was another hidden support level confirmation that is again a Fibonacci retracement level, only this time it was the 38.2% level. Some traders including me would consider that an acceleration of the established trend. The breakout above $32 and the gap fill are both signals that favor the resume of the uptrend.


The retracement is even more pronounced at the weekly chart.


STX stock trading on earnings day

This is going to be interesting. Increased popularity will probably lead to more-than-average volume and important news will provide the necessary volatility for day trading. And it’s not just news about earnings, as investors of OCZ and Seagate companies will be sitting on their seats’ end! I suppose Seagate news will be all over the internet during the day, no matter the report. Yet, if Seagate reports better than expected results, I strongly believe STX stock price will soar much like Western Digital.

Disclosure: No positions at time of writing.