To The Moon

Hi everyone, today I’ll be sharing my TA for one of the semiconductor names:

Micron Technology, Inc. (NASDAQ: MU)

This is the first time I will be using logarithmic scales in my charts, so the scaling might look “scary”. That being said, it reduces significant chart skew. Notice how MU has marked up its trend several times in the past few decades, since its IPO in 1984. What we can see from the weekly chart is that MU has been trading in a long-term uptrend.

We will now focus our attention on the 2011 marked up trend and more short-term trends. Just note there are multiple trends in play, dating back to the 2008 GFC.

In short, MU is coming into the Jan’23 support trendline, while forming a bullish divergence at support. Significant volume came in at the lows, in what I deem to be a potential capitulation move before a countertrend rally. Oscillators are healthy in that the Stochastic just had a bullish crossover while RSI is forming a bullish divergence at lows.

Given that MU has earnings into 25th Sept and it has hit support, I am now expecting a rally into earnings, before we (possibly) form a power earnings gap that will send the stock even higher. At the minimum, I’m expecting a retest of 94.99 by earnings. This level was prior resistance, so a support-to-resistance (S/R) flip is due. If we can get above that middle trendline of the yellow channel, then a retest of prior support at 111 is due.

What’s the downside risk here? Well, a retest of 75.35 and the retest of the 2008 support trendline as well as the 2011 middle trendline could be in the works. I am expecting major support and buyers to show up if we get there.

Despite seasonal weakness, I am of the view that MU’s stock price is being depressed for accumulation to take place before the real move higher. We’re getting stock downgrades and capitulation at lows, while institutions gradually start coming in and buying up what retail is selling. That’s what it is - a zero sum game. Thus, I am initiating coverage on MU with a BUY.

Sentiment: BUY (New)

Invalidation: Close below 75.35

Summary (with Price Targets - NFA):

• Jan’23 support trendline retest, RSI bullish divergence at lows, and a bullish crossover on the Stochastic oscillator

• Should see a period of mean reversion into earnings, with a move towards 94.99 the most likely outcome

• Extreme bearish sentiment on MU considering the raft of downgrades that have been coming in, and (some) capitulation volume at lows

• Invalidation of a long thesis should set in if MU closes below 75.35

$Micron Technology(MU)$ $Advanced Micro Devices(AMD)$ $NVIDIA Corp(NVDA)$ $Lam Research(LRCX)$ $VanEck Semiconductor ETF(SMH)$

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