Taking Another Look at Micron Technology Ahead of Earnings

It might be best to remain on the sidelines for now.

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We last looked at Micron Technology  (MU)  on August 12 and recommended, “Avoid the long side of MU as the charts suggest further declines ahead.” MU has weakened further and one Real Money subscriber is asking what the charts look like ahead of their earnings release scheduled for September 28. Let’s look.

In this daily bar chart of MU, below, we can see that prices weakened in August and are still trading below the declining 50-day moving average line. The slope of the 200-day moving average line is beginning to crest and intersects above the market around $80. This line could act as resistance in the days ahead.

The On-Balance-Volume (OBV) line shows some weakness in August but its next move is unclear. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside from below the zero line for a cover shorts buy signal.

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In this weekly Japanese candlestick chart of MU, below, we can see that prices have been trending lower for several months now. Prices have been trading below the 40-week moving average line for several weeks now.

The weekly OBV line has been in a bearish decline since April. The MACD oscillator is below the zero line but has been narrowing in recent weeks.

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In this daily Point and Figure chart of MU, below, we can see a potential upside price target in the $91 area. A decline and trade at $71.56 could weaken this picture.

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In this weekly Point and Figure chart of MU, below, we can see a tentative downside price target in the $64 area.

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Bottom line strategy: Sometimes we can see technical hints that traders are doing some aggressive buying ahead of an earnings release, but unfortunately I do not see such buying in MU. Maybe that will change in the days ahead but we would be getting ahead of ourselves. Currently I would remain on the sidelines of MU ahead of earnings.

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