Micron Technology faces a crucial decision! How to seize the trade opportunity? (2024.06.27)

Hello everyone, this week's 【Technical Tracking】 will analyze the global leading storage chip manufacturer — Micron Technology.$Micron Technology(MU.US)$。

Hot Events

On June 27, 2024 (Thursday), Micron Technology's stock price fell sharply by more than 7%. Previously, the company released its Q3 Earnings Reports for the fiscal year 2024, which were better than market expectations but did not adjust its guidance for Q4 performance, leaving hopeful Analysts somewhat disappointed.

Over the past year and a half, Micron Technology's stock price has skyrocketed nearly 200% driven by the artificial intelligence (AI) boom. The new high-bandwidth memory (HBM) launched by Micron Technology is highly anticipated, and this year's production capacity quota has already been sold out. Since HBM is a necessary component for the new generation of processors, it is compatible with NVIDIA's advanced AI chips, which can be used to better train large AI language models.

For the more imaginative fiscal year 2025, Micron Technology only stated that "revenue will set records, and profits will increase significantly," and added that the company did not actually make a forecast. This wording seems somewhat vague, leaving investors feeling uncertain.

Previously, many Analysts expected Micron Technology to raise its Q4 and next fiscal year's performance guidance. However, the capacity advancement in the semiconductor industry often takes longer than anticipated. According to Micron Technology, HBM is still in the capacity ramp-up phase.

Goldman Sachs analysts expect that in the profitable HBM market, Micron Technology will continue to capture a larger market share, and believe that the drop in its stock price has provided potential buying opportunities for investors.

Technical Analysis

Trend analysis:

The daily chart shows that Micron Technology's stock price has been in an upward trend since the end of February 2024, with an increase of nearly 100%. Although there were some adjustments in stock price around the Earnings Reports release, with a pullback of more than 10% from the highest point, the upward Trendlines remain intact.

Indicators interpretation:

• For over the past four months, Micron Technology's stock price has remained above the 50-day moving average (MA50), which is a clear medium-term bullish signal.

• Along with the stock price recently pulling back from its peak, the Volume has continued to increase, indicating that there is growing short-term selling pressure in the market.

• The ATR indicator (Average True Range), which measures price volatility, has risen to historical highs, reflecting extremely high market volatility and suggesting a greater likelihood of price breakouts or reversals in the near future.

Focus direction:

Currently, Micron Technology's stock price is at a critical position, near the rising trendlines on the daily chart. In the short term, it is expected that the stock price will find some Resistance near the rising trendlines during the correction process. However, once the stock price falls below this trendline, it indicates that the correction may reverse into a deeper decline.

Further support below can be monitored at the 50-day moving average. The potential resistance above will be around $144, which is the high point just before the Earnings Reports are released.

This content discusses technical analysis; other methods, including Fundamental Analysis, may provide different perspectives. The examples provided are for illustrative purposes only and do not reflect expected results.

All investments involve risks, including the potential loss of principal, and there is no guarantee that any investment strategy will be successful.