Micron Technology (MU)
My Thoughts on $Micron Technology (MU.US)$ The quarter was really solid. Balance sheet and cash flow management is impressive and reflects corporate discipline. The guidance is solid. The CEO is not only confident, but he is also talking about long-term agreements through 2025 with his clientele. Remember without memory, there is no AI, there are no AI-infrastructure providers like $NVIDIA (NVDA.US)$ , and there are no AI software developers and cloud providers like mega-cap tech. Who competes with Micron? $Western Digital (WDC.US)$ ? Not much competition there. $Seagate Technology (STX.US)$ ? Even less there. I'm thinking that Micron has a chance to build as much of a lead and as much of a mote in AI memory as Nvidia already has built in AI-capable GPUs.
Readers will see that MU ran in a tight, ascending price channel from late 2022 through April 2024 when the stock broke out to the upside. Let's now take a look at that breakout.
Readers will see that the breakout of the rising price channel fits fairly nicely into an upward sloping Pitchfork model, with most of the action in the upper chamber of said model. There have been a couple of failed breakouts from the pitchfork, but now, the central trendline of the model is under some pressure with today's weakness. Relative Strength is neutral. The daily MACD is not in the greatest shape. The 12-day EMA has crossed below the 26-day EMA, and the 9-day EMA is already negative. we move on.
Should the central trendline of the pitchfork fail to support MU through this weakness, the 50-day SMA is running parallel to that line and could do the job. I see this weakness in Micron as a potential opportunity to enter an AI-necessary name that many have missed, that has historically feasted and starved in cyclical fashion. Howver... the firm may longer have to go through the cycle in that way as demand is apparently going to be inelastic for some time for this kind of chip.
I am long MU and NVDA equity. I am short MU calls. am long MU calls.
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NYSE floor trader for over 30 years. Day trader, long-term investor, and anything in between.
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BelleWeather : Same positions!
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