Micron (MU) Is Trading Above Its Semiannual Pivot

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Micron (MU) Is Trading Above Its Semiannual Pivot

Micron Technology, Inc. (MU) is now trading above its semiannual and annual pivots, which are $77.95 and $75.84, respectively. The stock surged upward on Jan. 8 when results were released after the market closed on Jan. 7. The business provided a cautious forecast, causing the stock to fall from its January 8 high of $84.16.

Key Takeaways

  • At $77.95 and $75.84, respectively, Micron stock is trading above its semiannual and annual pivots.
  • Shares of the semiconductor behemoth ended at $78.67 on Monday, Jan. 11, up 4.6% year to date but 6.5% behind the post-earnings high.
  • Micron’s weekly chart is favorable but overbought, with the company trading above its five-week modified moving average of $70.94.

The semiconductor behemoth manufactures memory chips and random-access DRAM applications for PC and smartphone makers. Demand from internet-connected gadgets and data centers is the most important measure.

Micron ended at $78.67 on Monday, January 11. The stock is up 4.6% year to date and 6.5% lower than its post-earnings peak. Longer term, Micron stock is in bull market territory, having risen 152.7% from its March 18, 2020 low of $31.13. According to Macrotrends, the stock has a P/E ratio of 27.76 and does not pay a dividend.

Micron hit an intraday high of $97.50 in July 2000 and subsequently traded as low as $1.59 in November 2008 as a survival option. I see a survival option as a stock trading between $1 and $3 per share, with investors buying and holding the shares knowing that their investment may be completely destroyed.

The Daily Chart for Micron

Refinitiv XENITH
  Candlesticks and Oscillators for Successful Swing Trades

Micron’s daily chart indicates the creation of a golden cross on Nov. 3, when the 50-day simple moving average (SMA) moved above the 200-day SMA, indicating that higher prices are on the way. This corresponded to the stock’s high of $84.16 on January 8.

On January 4, the stock rose over its yearly pivot of $75.84. Then followed the profits surge to a new high on January 8th. Micron stock has been trading around its semiannual pivot of $77.95 since then. The company is trading substantially above its 50-day and 200-day simple moving averages, which are now at $66.69 and $52.78, respectively.

A simple moving average (SMA) computes the average of a certain price range, generally closing prices, divided by the number of periods in that range. This technical indicator may help determine if an asset’s price will continue or reverse a bull or bear trend. The SMA may be reweighted as an exponential moving average (EMA) based on current price activity.

The Weekly Chart for Micron

Refinitiv XENITH

Micron’s weekly chart is favorable but overbought, with the company trading above its five-week modified moving average of $70.94. The stock is also trading above its 200-week simple moving average, or reversion to the mean, at $45.01. Take note of how the 200-week SMA gave buying chances between December 28, 2018 and March 20, 2020.

With a rating of 88.57, the 12 x 3 x 3 weekly slow stochastic reading is overbought. This value was 91.28 a month ago, which is over the 90.00 threshold as an expanding parabolic bubble.

Trading Strategy

Micron stock should be purchased if it falls below its annual and quarterly value thresholds of $75.84 and $72.15, respectively. Reduce shares when the stock reaches a high of $84.16 on January 8th.

  Quantitative Trading Definition

How to Use My Value Levels and Risky Levels

The December 31, 2020 closures were fed into my proprietary analytics, which resulted in new monthly, quarterly, semiannual, and annual levels. Each of these time frames employs the last nine closures. After the conclusion of each week, new weekly levels are computed. After the end of each month, new monthly levels are created. Each quarter, new quarterly levels are introduced. Semiannual levels are updated in the middle of the year. Annual levels are in effect all year.

My hypothesis is that nine years of volatility between closing is sufficient to infer that the stock has factored in all probable bullish and negative occurrences. Investors should purchase shares on weakness to a value level and sell shares on strength to a risky level to capture share price volatility. A pivot is a value or danger level that has been breached within its time period. Pivots operate as magnets that are likely to be tried again before their time horizon ends.

How to Use 12 x 3 x 3 Weekly Slow Stochastic Readings

My decision to use 12 x 3 x 3 weekly slow stochastic readings was based on backtesting many techniques of measuring share-price momentum in order to discover the combination that produced the fewest false alerts. I did this after the 1987 stock market meltdown, and I’ve been pleased with the results for more than 30 years.

The stochastic reading for the stock encompasses the previous 12 weeks of highs, lows, and closes. A raw assessment of the disparities between the highest high and lowest low vs the closing is available. These levels are tweaked to allow both quick and slow reading, and I discovered that slow reading worked best for me.

  Day-Trading Rules for Rookies

The stochastic value ranges from 00.00 to 100.00, with readings over 80.00 indicating overbought and readings below 20.00 indicating oversold. A value over 90.00 indicates the creation of an inflated parabolic bubble, which is often followed by a 10% to 20% decrease over the following three to five months. A value of less than 10.00 is regarded too low to ignore, and is usually followed by 10% to 20% advances over the following three to five months.

The author has no holdings in any of the stocks mentioned and has no intentions to start new positions in the next 72 hours.

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