Western Digital Corp (NASDAQ:WDC) stock is taking a breather from its meteoric rise, down 1.3% at $128.90 at last glance after earlier hitting record highs. The security surged earlier following news that the company, which is the world's largest hard disk drive (HDD) manufacturer, plans to invest $1.5 billion in Japan in the next five years. Most of the work will run through WD's R&D center in Fujisawa City, one of its most critical innovation sites.
WDC is up over 300% since its early April lows, rising 49.4% in September alone. The 10-day moving average has followed closely behind as underlying support, contributing to the stock's 185.3% year-to-date lead.
Options traders appear to be leaning toward a correction, with 16,000 puts exchanged so far today -- nearly double the amount typically seen at this point -- in comparison to 10,000 calls. The weekly 10/3 130-strike put is the most popular, with new positions opening there.
Interestingly enough, short interest has been building during this rally, up 12.4% in just the last two weeks, and now represents 11.5% of WDC's available float. It would take shorts over five days to cover, at the stock's average pace of trading, leaving plenty of short covering potential still.
