Very much like the stock of Alcatel-Lucent (ALU), which I discussed HERE yesterday, Micron Technologies (MU) has been trading in the shadows of its heydays for over a decade. For a little perspective, see the below chart looking all the way back to 1999. What once was a high flying stock trading close to the $100 mark, has been confined to a trading range between roughly $2.00 and $18.00 since late 2002.
The above chart, while nice to see doesn’t help us a great deal in the more near and medium-term technical analysis of the stock. Thus I zoomed into a chart looking back to 2002 in order to draw some more meaningful lines of support and resistance. The first obvious line of resistance is near the $18 mark, and a little over $3.00, or 22% above the stock’s current price.
Next, note that in March of this year Micron Technologies (MU) busted past a multi-year diagonal resistance area, after which it consolidated just north of said resistance line, which ultimately led to a tireless rally into yesterday’s highs.
The steep rally in Micron Technologies (MU) so far tallies up to 140% year to date, which Wednesday September 4th was further topped off on massive volume of almost 118 million shares. Wednesday’s 5.30% rally in the stock came on the back of positive comments about the company from Sterne Agee’s Vijay Rakesh. Semiconductors as a group and as measured by the SMH etf also had a great day yesterday, which further speaks to possible sustainability in the rally by Micron Technologies (MU).
While Wednesday’s rally didn’t close the stock at a new year to date high, the stock did manage to gap out of a multi-week consolidation phase on huge volume, which from a pure technical perspective is not something I can assign much bearishness to.
From a medium-term point of view, the stock has important support near the $13.50 area and if it can keep up its momentum may just be able to move toward the $16 area in the not too distant future.