In recent days, we looked at an Electronics & Semi-Conductor Stock, Lam Research Corp, in our daily commentary as stocks which had begun forming initial positive moves. Against this sector backdrop, today we analyze another example in the Electronics & Semi-conductor Area, Micron Technology Inc (MU). This is the first time we have commented on this name in our dailies. The Electronic and Semi-Conductor Sector is still in the Unfavored Zone in the SIA Stock Sectors Report, however, it has strengthened to the top of the Unfavored Zone at the 18th spot and has moved up 10 spots in the last month and 11 spots in the last quarter warranting it as a sector to monitor going forward for materialization into an potential intermediate trend.
Micron Technology looks to be one of the relative strength leaders in the Electronics and Semi-conductor space as it just entered the favored zone of the SIA S&P 500 Index report on June 6th at a price of $108.56. Currently it resides in the 65th spot in the report showing extremely strong relative strength moves up the S&P 500 report gaining 27 spots in the last day, 94 spots in the last week, 314 spots in the last month and 349 spots in the last quarter exemplifying the consistent money flow increases in the shares over the past little while. Currently the shares are at $114.14 as of yesterday’s close which is an almost $6 price increase since entering the favored zone last week.
In looking at the attached candlestick chart of MU, we see the shares form a rounded bottoming pattern in the 2022-2023 calendar years before finally finding a strong support zone at the $50 level in both the September and December 2022 time frame. Then the shares formed a pattern of higher highs and higher lows from that point onwards until a parabolic formation materialized starting in early 2024 until it reached a ceiling at the $145 to $155 area where the bearish gravestone doji weekly candlestick formed in June of 2024. This pattern indicates that buyers initially pushed the price higher, but sellers eventually took control, driving it back down towards the opening level. This is an important resistance level to watch to see if the shares can break above this point. What followed was an extreme downtrend when the shares pulled back sharply to just under the $90 level. A brief sideways trading range ensued from the $85 to $110 level before another bottom ensued ultimately taking the shares all the way down to the $65 level. Now, most interestingly, we see the shares have gained some traction since early April where a strong uptrend has materialized with the shares currently trading in the $115.00 level breaking above prior resistance at the top of the brief trading range at the $110 price point.
If this early positive move can materialize further, resistance will be coming in the $130 area but if the shares manage to the break above that point, next resistance will be at the top of gravestone doji candlestick at $155.00. To the downside, support will be at the $85.00 area where the shares temporarily found a bottom in 2024.
In looking at the Point and Figure chart at a 2% scale for an investment grade analysis, we see the shares were in a steady uptrend from February of 2023 all the way to June of 2024. Then the bears took control, and the shares fell off a cliff with a strong column of declining O’s lasting 28 boxes before finally finding a temporary bottom at the $87 price point. A sideways trading range formed from August of 2024 to April of this year, when the shares failed to hold support at the $87 level and ultimately another strong column of declining O’s formed - this time lasting 23 O’s before finding a bottom at $64.74. Most recently, we see the bulls wanting to take control as the shares are now experiencing a rising column of X’s lasting 26’s boxes without even a 3-box reversal forming yet.
Most interestingly, for technicians, the shares have risen above the long-term downtrend (red) line at the $102.08 price level. There is some minor resistance here at the $114.96 level but if the shares manage to break above this point, next resistance is at $129.47, $134.70 and lastly its all time high at $154.73. On the downside, support is at its 3-box reversal of $104.13, then below that, the psychological $100 level also coincides with the long term down trend line, which may act as support. The shares currently exhibit a bullish Spread Double Top pattern and with an SMAX score of 9 out of 10, the shares are exhibiting very good near-term strength against the asset classes.
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