Seagate Technology’s share price was heavily penalized and is now in an oversold situation near to a solid support area.

From a fundamental viewpoint, the company seems undervalued relatively to its peers with a "EV/Sales" of 1.05. In the recent months, the earnings estimates for the next year are regularly revised upward by analysts. With an EPS estimated at 5.40 for this year and 5.82 for the next year, Seagate Technology is currently paid 7.64 and 7.09 times the results.

Technically, the security fell sharply for several trading session. This fall has led the stock towards the USD 40.3 support area, which could become useful as a stepping stone for a technical rebound. The target is the USD 43.6 resistance. The oversold situation and the support of the 100-day moving average argue in favor of a reversal.

The trading strategy can benefit from the proximity of the strong support currently tested in order to buy Seagate Technology. The potential gain is 5.6%. Investors might place a stop loss order under the short term support at USD 40.3 in order to avoid important losses.