Here's a Key Price Area to Watch for Micron

Let's check the charts are MU pulls back to its breakout point.

Semiconductor maker Micron Technology (MU)  made an upside breakout from a base pattern in the middle of May. Prices rallied further but have now pulled back to the breakout point around $65-$64.

Let's check and see if this is another chance to buy. 

In this daily bar chart of MU, below, I can see that prices stopped at the $65-$64 area several times from August, but finally prices broke out on the upside in the back half of May. MU has since pulled back to its breakout point. Bears may say we just witnessed a bull trap, but I would not come to that conclusion. Ideally we should see renewed buying around $65 by traders who did not buy the breakout or want to add to those positions. The slopes of the 50-day moving average and the 200-day moving average are positive. The daily On-Balance-Volume (OBV) line is struggling but up from an early April low. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has crossed to the downside for a take profit sell signal.  

 

In this weekly Japanese candlestick chart of MU, below, I see a "normal" reaction in an uptrend. MU trades above the rising 40-week moving average line. The weekly OBV line is slowly improving. The MACD oscillator is bullish. 

 

 

In this daily Point and Figure chart of MU, below, I can clearly see how the $64 level has first acted as resistance and hopefully now acts as support. The software is projecting the $84 area as a price target. 

 

 

In this weekly Point and Figure chart of MU, below, I can see an upside price target in the $86 area. 

 

 

Bottom line strategy: We should know fairly soon if traders and investors will become buyers around $65-$64.

 

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