Micron - At Key levels before the next major trend forms
Formation: Key trend line formation on daily for MU with the next support @ 52.00. A close below this level on daily opens up significant selling pressure with the first target @ 45.62.
Longer and steeper trend lines have farther price targets compared to their shorter and shallow counterparts in general. This type of a trend line formation in MU leans toward the longer and steeper type.
The downside target projection coincides with the prior bottom formed in May 2018 and is also the classic target of trend line break(measured from the distance between the immediate high @58.00 to the trend line , a distance of $6.63, projected downwards).
The case for the Short:
Analysing the MACD and Stochastic:
A bearish MACD divergence that occurred between the March and May 2018 highs indicating a selloff; MACD divergences have 2 levels of take profit targeting once they begin driving price in the desirable direction. The first is reached when the 1st uptick of the MACD histogram occurs (uptick for bearish divergences and downtick for bullish divergences) , in this case as on 2 July 2018.
The 2nd level of profit taking post a bearish MACD divergence usually occurs in a specific combination: A sell side crossover in MACD is seen below the zero line, indicating selling pressure and the position is held until a short term bullish divergence is seen on the Slow stochastic. I believe that we are at this particular point in the MU trade where the sell side crossover signal has been generated by the MACD and the Slow stochastic bullish divergence is yet to form.
This view is subject to revision if a daily close above 57.60 occurs ( short term downward trend line break point)
Longer and steeper trend lines have farther price targets compared to their shorter and shallow counterparts in general. This type of a trend line formation in MU leans toward the longer and steeper type.
The downside target projection coincides with the prior bottom formed in May 2018 and is also the classic target of trend line break(measured from the distance between the immediate high @58.00 to the trend line , a distance of $6.63, projected downwards).
The case for the Short:
Analysing the MACD and Stochastic:
A bearish MACD divergence that occurred between the March and May 2018 highs indicating a selloff; MACD divergences have 2 levels of take profit targeting once they begin driving price in the desirable direction. The first is reached when the 1st uptick of the MACD histogram occurs (uptick for bearish divergences and downtick for bullish divergences) , in this case as on 2 July 2018.
The 2nd level of profit taking post a bearish MACD divergence usually occurs in a specific combination: A sell side crossover in MACD is seen below the zero line, indicating selling pressure and the position is held until a short term bullish divergence is seen on the Slow stochastic. I believe that we are at this particular point in the MU trade where the sell side crossover signal has been generated by the MACD and the Slow stochastic bullish divergence is yet to form.
This view is subject to revision if a daily close above 57.60 occurs ( short term downward trend line break point)
Comment:
45.62 Target Achieved.