Micron Oversold After Testing Dotcom Highs

NASDAQ:MU   Micron Technology, Inc
Micron Technology has stalled after a big rally. Is it time to buy the dip?

The first pattern on the memory-chip maker’s chart is the oversold condition on stochastics. Given its current uptrend, strong fundamentals and positive macro backdrop (GDP +6%), that pullback alone is interesting.

Next is a trend line running along the lows of January 27 and March 25. It held that line last week.

Third, consider the $96.96 level where MU peaked on April 12. That was its highest level since July 2000, when the stock hit a record price of $97.50. It’s not a surprise to see the shares pause around that old resistance – especially because it’s also near the $100 mark.

Overall, MU is a conventional macro/momentum story. It’s roughly doubled since the summer lows but has always been viewed as a highly cyclical chip play. Earnings have been strong for several quarters and it now has the added catalyst of automotive demand increasing.

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