During Wednesday night's Lightning Round on Jim Cramer's "Mad Money" program, Cramer favored Micron Technology (MU) over a company like Seagate Technology (STX) . "I think there are better stocks out there, including Micron Technology" said Cramer.
Let's check out a few charts.
In this daily bar chart of MU, below, we can see a downtrend the past 12 months. Prices have been able to hold around $32 in the past couple of weeks or just above the December nadir. MU is below the declining 50-day moving average line, as well as the bearish 200-day line. The On-Balance-Volume (OBV) line has been weak since early April and signals that sellers of MU have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has turned up to a cover-shorts buy signal, but it is still well below the zero-line and an outright buy signal.
In this weekly bar chart of MU, below, we can see a bearish setup. Prices are below the declining 40-week moving average line. The weekly OBV line shows a peak at the beginning of 2018 or months of aggressive selling. The MACD oscillator is in an outright sell mode with the indicator below the zero-line and pointed lower.
In this Point and Figure chart of MU, below, we can see a potential downside price target in the $29 area, or a retest of the December low.
Bottom line strategy: I have no idea what is driving the share price of MU, but for now it looks like we could see a retest of the December low. That may or may not be a buying opportunity.
