Micron Technology, Inc. (MU), which has beaten the earnings per share (EPS) estimates on June 29, and the stock gapped higher at June 30, to $52.47. The stock opened on the 1st July below the monthly pivot for the month of July to $51.97.
The giant semi-conductor focuses on memory chips and random access DRAM products sold on the PC and smartphone manufacturers. Cyclical demand may be difficult to predict. The key is the application of new internet-connected devices and data centers.
Micron stock closed last week at $49.83, down 7.3% year to date, and in the correction of a territory to 18.6% below its Feb. 12 high of $61.19. The stock is also in the bull market territory, to 60.1% above its March 18 low of $31.13. The stock has a P/E ratio of 25.01 and does not offer a dividend, according to the trends.
Micron stock suffered a fall of 49% from its Feb. 12 high of $49.83 at its March 18 low of $31.13. He then had an increase of 76% from this low to its June 5 high of $54.82. Micron set its all-time high of $97.50 in July 2000 and traded as low as $1.59 in November 2008, as an “option on survival”. I view a stock trading between $1 and $3 per share as an “option on survival, as you buy and hold shares of the realisation of your investment could be totally lost.
The daily chart for Micron
The daily chart for Micron shows the formation of a golden cross on August. 2, 2019. A golden cross occurs when the 50-day simple moving average rises above the 200-day simple moving to indicate that the price increase to come. This follow-up of the stock at its Feb. 12 high of $61.19.
Then came the 49% crash in the March 18 low of $31.13. The stock gapped below its 50-day simple moving average on Feb. 24. At the same time, it gapped below its annual pivot at $55.84. Micron stock has broken below its 200-day simple moving average on March 11, setting the stage for the March 18 low of $31.13.
The V down the track the stock up to the 200-day simple moving average on the 7 April. This average has been a magnet since that date. The stock traded as high as $54.82 on 5 June, remaining shy of the annual pivot at $55.84. Micron stock is between 200-day simple moving average at $48.91 and its monthly pivot for the month of July to $51.97.
The weekly chart for Micron
The weekly chart for Micron is neutral, above its five-week modified moving average of $48.73. The stock is also above its 200-week simple moving average, or the return to the average, is $40.00. The 12 x 3 x 3 weekly slow stochastic reading is finished the last week at 68.40, down from 70.73 June 26.
Trading strategy: Buy Micron stock on weakness to its 200-week simple moving average at $40.00. Reduce the holdings on the strength of its monthly and annual risky levels at $51.97 and $55.84, respectively.
How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. The annual levels of to remain on the charts. The level of the month of July was based on the last nine-month period firm, the third quarter was based on the last nine quarterly closes, and the second half by 2020 the level was based on the last nine to the half-year closes. New weekly levels are calculated following the end of each week.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.