Micron Technology (MU) is slated to report its fiscal first-quarter results after the closing bell on Wednesday. Let's check out the charts of this semiconductor maker in advance of those numbers.
In my last review of MU on Sept. 19 I wrote, "The technical picture of MU could turn quickly, but the charts and indicators are bearish and further declines are anticipated in the weeks ahead."
In this daily bar chart of MU, below, I can see that prices made a bounce to the upside from late September but the rally fizzled in mid-November short of the underside of the declining 200-day moving average line. Now prices are back below the 50-day line. The daily On-Balance-Volume (OBV) line is pointed lower, telling us that sellers of MU are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish -- the trend is weak.
In this weekly Japanese candlestick chart of MU, below, I see a bearish setup. Prices are in a longer-term decline as they trade below the bearish 40-week moving average line. The candles show us an upper shadow at the underside of the 40-week line -- a classic rally failure. The most recent candle also shows us an upper shadow as traders continue to reject the upside. The weekly OBV line has been weak for the past two years and is still weak. The MACD oscillator is bearish.
In this daily Point and Figure chart of MU, below, I can see a potential downside price target in the $47 area.
In this weekly Point and Figure chart of MU, below, I used close-only price data. Here the software projects a downside price target in the $43 area.
Bottom line strategy: I have no knowledge of what MU will tell shareholders on Wednesday, but from my perspective the charts look vulnerable to further declines. Avoid the long side of MU.
