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Jeff Cooper: SanDisk May Find New Support at its 20-Day Moving Average


If SanDisk breaks its 20-day moving average instead, it may head to $90.

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

SanDisk's (NASDAQ:SNDK) change in character yesterday (June 9), when it stabbed down in contrast to broad market strength, was a tell-tale sign telegraphing today's follow-through. This follow-through perpetuated the first test of SanDisk's 20-day moving average since it reclaimed it in mid-April. SNDK was one of the first tech names to turn up strongly at that timw, so its behavior here will be worth watching. Note how the large gap in mid-April following an undercut of the 20 and 50 DMAs set up the persistent creep higher for the last seven weeks.

The normal expectation is the first test of the 20 DMA defines support. However, an authoritative break of the 20 DMA with follow-through probably indicates a test of the $90 strike.

Below is a daily SNDK chart for 2014 with its 20 (Blue) and 50 (Yellow) DMAs.

Twitter: @JeffCooperLive
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No positions in stocks mentioned.

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