Micron Technology Inc (MU) has tripled from its 2016 lows, but in recent weeks I have witnessed a shift from an uptrend to a sideways trend in the charts. A weakening chart picture, along with signs of more-aggressive selling, has turned me very cautious now on MU. Let's check the latest charts and indicators so I can tell you my technical concerns.
In this daily bar chart of MU, below, we can see the uptrend from last August and several successful tests of the rising 50-day moving average line from December. The tests in December, February and April hardly probed the average line. In May, prices quickly dipped below the line, and in early July, prices closed below the line. Recently, MU gaped lower and made a couple of closes below the line. Yesterday, MU rallied above the flattening 50-day average -- and failed. A shift from up to sideways.
Now check the direction of the On-Balance-Volume (OBV) line. The line rises until early June -- telling us that buyers have been more aggressive during the advance. In July, the OBV line makes a lower high as prices make a lower high. This is not a bearish divergence, but it does show that sellers have become more aggressive in recent weeks. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been in a bearish configuration since early June and is close to crossing below the zero line for an outright sell signal.
In this three-month candlestick chart of MU, above, we can see bearish candle patterns at each of these three peaks -- a dark cloud cover in early June. A doji in late June and a spinning top, hanging man and another spinning top last week. The declining OBV line is easier to see on this chart.
This weekly chart of MU is more mixed than bearish. Prices are above the rising 40-week moving average line. The weekly OBV line has been stalled for the past three months, but the MACD oscillator has been rolling over for the past four months.
In this Point and Figure chart of MU, above, we can see that a decline to $29.52 will start to weaken the chart. A $25 downside price target is readable.
Bottom line: A break below $29.50 and $29 is likely to precipitate further declines and a potential test of the 200-day moving average line in the weeks ahead.