It’s Time to Increase Exposure to Micron
U.S. memory chip king Micron Technology ($MU) reported the firm’s fiscal third quarter earnings in late June. The shares spiked the next day and have been working their way lower ever since.
As I work on this piece, Micron is up 175% from its late March $311.49 low. That said, the shares are also down almost 32% from that late June high of $1,255. At the Sarge-folio, we rode the memory/storage trade from much lower prices into the sunset, and then we got slapped around a bit.
We are long out of Western Digital ($WDC) and Seagate Technology ($STX). We have not used either of those names for anything more than day-trading vehicles in weeks, maybe even months. I’m not looking up the exit dates. They were good exits. We also got down to an odd lot (literally) in SanDisk ($SNDK) which is still the case. Micron, though, outside of a small sale, we haven’t messed with all that much. Is it finally time to add to this long position? Quite possibly. Let’s go to the chart…
The Chart
This is interesting. Despite MU having suffered three consecutive red candle sessions with a fourth in the works, this stock is trying to break out. Huh? How is that possible? Gather round, chili dogs, we have something to say.
Readers will note that MU has developed what is a falling-wedge pattern of bullish reversal over the past six-plus weeks. The upper trendline of the wedge had been tested on four separate trading sessions before cracking. That line has dropped more quickly than has the share price. See that algorithms have tried to exploit the space between that line after cracking and the stock’s 21-day EMA. That’s where swing traders have been making sales.
The 21-day line has acted as resistance for six straight sessions. If that door opens, look out because the Swedes are going to come out of the weeds, gang (just an opinion). I would like the 50-day SMA to be the pivot (as it is more meaningful to the pros) and maybe it is, but this line, due to this recent activity is certainly now “a” pivot.
In addition, while relative strength has flatlined, the daily MACD is just starting to show some life. The histogram of the nine-day EMA went positive on August 6 and has held that move. That’s at least short-term bullish. On top of that, the stock’s 12-day EMA is close to overtaking its 26-day EMA. That would be another positive signal once realized. Am I going to add some Micron? Where? Right here. When? About 30 seconds after you kids read this.
At the time of publication, Guilfoyle was long SNDK and MU equity.
