For his final "Executive Decision" segment of Mad Money Friday night, Jim Cramer checked in with Sanjay Mehrotra, president and CEO of Micron Technology Inc. (MU) , a semiconductor maker that's pledged not to lay off any employees during the Covid-19 outbreak.
Micron is benefiting from strong data center demand as well as an uptick in laptops and tablets as consumers and students work and learn from home. Mehrotra said Micron is well positioned in all of these markets.
We looked at the charts of Micron before it released its earnings writing that, "MU looks like it has fallen more than the broader market and maybe that will work to its advantage when it releases its earnings.
I have no idea what to expect, but I get the sense that the news has been discounted." Prices have firmed up since last Wednesday so let's check again to see if MU can supply some positive returns to investors and traders.
In the daily bar chart of MU, below, we can see some positive developments. Prices have rebounded and are poised to retest and maybe break the underside of the rising 200-day moving average line. The On-Balance-Volume (OBV) line shows only a slight decline from February into March and that suggests that prices fell of their own weight and not from aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal.
In the weekly bar chart of MU, below, we can see that prices retested the lows of 2019. Prices are below the still rising 40-week moving average line.
The weekly OBV line shows only a minor decline in recent weeks suggesting that investors did not liquidate longs. The MACD oscillator is still above the zero line though in a take profits sell mode.
In this Point and Figure chart of MU, below, we used daily data and a traditional even dollar scaling. Here an upside price target of $68 is being projected.
Bottom-line strategy: With a potential $68 price target from our Point and Figure chart of MU, above, the risk/reward profile is attractive. Traders could go long MU at current levels risking a close below $39.