Micron Technology (MU) was one of the 15 tech stocks we highlighted on June 9 that we considered vulnerable to a pullback. In the weeks since that update, the chart and indicators for MU have weakened.
(See Jim Cramer's take on Micron Technology in today's piece: Top 10 Tech Stocks Compared to the Dotcom Era (Part II))
Let me show you what I see.
In this daily bar chart, above, we can see that in early June MU was above the rising 50-day moving average line but now it is testing this mathematical trendline. The level of volume in June looks like it is heavier than in prior months and could mean sellers stepped up their activities in that prices have not made any fresh headway since June 9. The daily On-Balance-Volume (OBV) line weakened in June and suggests that sellers have become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) has turned lower with take-profits sell signals.
In this weekly bar chart of MU, above, we can see it has made a big rally over the past two years and that prices are back to a large resistance zone from $28 to $36 from late 2014 and early 2015. MU is above the rising 40-week moving average line. The weekly OBV line has turned lower and the MACD oscillator crossed to a take-profits sell signal.
In this Point and Figure chart, above, we can see a big mark-up in a short period of time. A $22.50 price target was met and exceeded. Chart support is not visible until the $20-$18.50 area.
Bottom line: It looks like MU is transitioning from an uptrend to a sideways trend. If the broad market continues under pressure, MU runs the risk of a correction toward the 200-day moving average line, which intersects down around $24.