Trade Recap of Micron Technology Earnings

Following $Micron Technology(MU)$ recent filing of its 10-Q report, which revealed a significant turnaround in its financial performance, including a substantial increase in net income and revenue, analysts have responded with positive sentiment. Morgan Stanley, for instance, raised its price target on MU stock from $78 per share to $98 per share, reflecting the optimistic outlook.

MU Daily Chart

In line with this positive sentiment, I executed a bullish trade strategy on MU earnings day. Specifically, I sold a $MU 20240426 93.0 PUT$ for MU at $5.39 during market open.

20240426 93.0 Put Chart

My decision was based on a bullish stance, supported by the stock's opening above all the EMAs and its formation of a bull flag consolidation pattern just before earnings were released post-market. While acknowledging the potential for either direction following the consolidation, I deemed the upside to hold greater potential and thus assumed the risk by entering the trade.

20240426 93.0 Put

The outcome of the earnings release exceeded my expectations, resulting in a significant move in the stock price. Consequently, I closed the put options trade by buying back at $0.31, realizing a modest 94% gain after just one day. Despite this immediate gain, my bullish outlook on MU persists, further bolstered by technical analysis indicating a breakout from a cup and handle consolidation formed over the past 2 decades.

Looking ahead, I maintain my bullish stance on MU and intend to hold onto my shares as long as the fundamentals continue to support this thesis. With the company demonstrating strong financial performance and strategic advantages in the semiconductor industry, I anticipate further upside potential in the long term.

MU shares

Disclaimer: The shared trades and analysis are for informational purposes only and should not be considered financial advice. Always conduct your research before making investment decisions.

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