Shares of Seagate Technology (STX) are down over 17% today after the company reported better than expected EPS but came up short on the revenue and guidance front.  Recently, the first quarter hasn’t been a particularly positive period for STX as the day after last year’s Q1 report it dropped 19%.  While the negative reaction to this morning’s earnings report from STX seems excessive, part of the outsize reaction may be due to the fact that heading into the report, the stock appeared to be on the verge of a technical breakout above its highs from March.  For a lot of chart watchers out there, that breakout heading into earnings probably sucked them into the stock on the long side.

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Following the disappointing result, though, those traders that were looking for a short-term rally on a breakout have likely rushed for the exits.  As it stands now, shares of STX are currently testing support just below $42 — representing the highs from December and the opening level from the gap higher after Q1 earnings.  When it comes to chart reading, what a difference a day makes

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