Micron Technology Inc. (MU) continues to rally. In our last review, we said, "MU has been a strong performer over the past 12 months and without a pattern of distribution before the fundamental news today I would suspect that any downward price reaction may not last long and may not travel far. Nevertheless, aggressive traders long MU from lower levels might consider raising their stop protection to $35 from a close below $33."
With hindsight since Oct. 11 we can see that MU traded sideways in the $42-$40 area and the longs are happy as new highs have been reached. MU is above the rising 50-day moving average line and the 200-day line continues its smooth rise. The On-Balance-Volume (OBV) line continues its rise from early July to confirm the advance. The Moving Average Convergence Divergence (MACD) oscillator just crossed to the upside for a fresh outright buy signal.
In this weekly bar chart of MU, below, we can see an eye-popping rally from $10 in early 2016 to $45 now. It would have been really nice to have over-weighted this stock when putting together a portfolio. Prices are clearly above the rising 40-week moving average line. The weekly OBV has made new highs, with the price action and the MACD oscillator on this time frame also clearly bullish.
In this Point and Figure chart, below, we can see the uptrend plotting price reversals. A possible upside price target in the $65-$66 area is indicated.
Bottom line: Traders could raise their sell-stops to a close below $37 now from below $35. The round number of $50 is our first price target, with the $65 area later.