Stock of the day: Micron Technology

Today’s stock of the day is Micron Technology, which we previously analysed at the end of last year. Back then, we were bullish and it was a great call on the mid and short-term as Micron was trading higher, until the middle of January when the stock dropped quite rapidly.

Today, we’re focusing on this drop. Technically, it created a giant double top formation (yellow) on the weekly chart. This kind of setup can be really powerful and can potentially bring a major sell signal for months. What’s important here is that the price managed to break the neckline of this formation, which at the same time is an absolutely crucial long-term horizontal support created by the highs from 2018 and 2020 (green). That leaves no doubt here and really leaves no hope for a better tomorrow.

A potential target is currently the long-term up trendline (black). Chances that we’ll get there are quite significant, especially since this support is not far away. Real mayhem would start if this support is broken but maybe it’s still too early to know for sure if that’s really going to happen. For now, let’s focus on the test of that support to see how well that serves traders.