Sandisk stock: Murrey Math Lines points to a jump to $500

Sandisk stock price jumped by over 27% on Tuesday, reaching its all-time high, and continuing the bull trend that started in April, when it bottomed at $28.80. It has soared by over 43% this year, making it the best-performing company in the S&P 500 Index.

This article explores why Murrey Math Lines tool points to more upside, potentially to the key resistance at $500.

Sandisk stock has jumped as storage demand soared

Sandisk is a top player in the technology industry, where it offers products like SSDS, memory cards, USB flash, and embedded & removable solutions. Its top clients include companies like Accenture, Pure Storage, and Target.

The company’s business has done well as demand for memory solutions has soared in the past few years. Other large companies in the industry like Western Digital, Seagate, and Micron, have also soared and were the best performers in the S&P 500 Index.

The most recent results showed that Sandisk’s business continued doing well, helped by the growing data center industry and the PC refresh cycle, and by Windows 11 adoption.

The results showed that the company's data center revenue rose to $269 million, up 26% from the previous quarter. Also, its edge business made $1.38 billion, up by 26% QoQ, while the consumer revenue rose by 11% to $652 million.

The total revenue rose to $2.30 billion, up by 23% from the same period a year earlier. Also, the operating income rose by 145% QoQ to $245 million, while the adjusted free cash flow rose to $448 million.

The management believes that the company has more room to grow because of the elevated demand. Also, analysts expect the upcoming results to show that its revenue will rise by 40% to $2.61 billion.

The average estimate for the year is expected to come in at $10.56 billion, up by 43% YoY. They also expect the coming year’s revenue to be 24.5% to $13.17 billion. 

Sandisk’s earnings per share (EPS) is expected to continue growing, coming to $13.25 this year and $21.1 in the coming one.

Wall Street analysts believe that the company has become highly overvalued. The average estimate is that the stock will slip to $269, down from the current $349. Similarly, another survey by MarketBeat shows that the consensus target for the stock is $213, also representing a big drop to $349.

One reason for this is that the company has become highly overvalued as its market capitalization jumped to over $51 billion. Another risk is that the company is facing substantial competition from other companies like Western Digital, Samsung, and SK Hynix.

Sandisk share price technical analysis 

The daily timeframe chart shows that the SNDK stock price has surged from a low of $28.80 last year to the current $350. It soared and crossed the important resistance level at $282, its highest level on November 12. Moving above that level is important as it invalidated the double-top pattern.

The stock has moved above all moving averages and the Supertrend indicator, a sign that bulls are in control. It is also approaching the strong, pivot and reverse level of the Murrey Math Lines.

Oscillators like the Relative Strength Index (RSI) and the Stochastic have continued rising. Therefore, the stock will likely continue rising as bulls target the ultimate resistance level at $500c up by 43% above the current level. A drop below the support at $282 will invalidate the bullish outlook.