Micron Tech (MU) 20180423 – 20180427

Technical analysis (Charts) is but one tool in an investor and Trader’s stock market analysis toolbox. Investors and traders, whether short, intermediate, or long term, should put the fundamentals of stocks and securities they may consider, or already are investing in, FIRST and foremost. Second, it doesn’t hurt to inform and educate oneself on technical analysis, if only to learn the similar, if not the exact same ‘numbers’ the hedge funds and Hi-frequency super-computer Traders (HFTs) are looking to wrap their convoluted trading schemes around. Third, you do need to pay attention to Sentiment. Fourth, you need to listen to conference calls, not just in the company stocks and securities you own, but in those of their customers, and their competitors.

When you accomplish these tasks, you will be able to read analyst reports and news articles for information, differing points of view, and to take note of paticular relevant material and information … you’ll also spot missing information. Due to time and space constraints, no article can include every detail, because the article would become incredibly long, dull, boring, and tossed aside … like the annual reports companies send out. If the article(s) leave out important information, whether it supports, undermines, or refutes, the author’s point of view, then an uninformed investor/trader may be misled into buying, holding, selling, or short selling. That isn’t FAIR, or right!
This month has seen a number questionable articles and analyst reports. The UBS analyst report of April 4th, 2018 initiated coverage of Micron Tech, with a $35 price target, and a 3.5 EBITDA P/E ratio … based on past cycles. Past cycles? In my previous blog, I gave two examples of past cycles:

(a) the unfortunate fire at the SK Hynix fab in Wuxi, China where, as in Murphy’s Laws, if any number of things could go wrong, the worst happened. The fire, the SK Hynix attempt to switch another fab from NAND production to DRAM met with un-satisfactory yield issues. It took more than a YEAR for SK Hynix to get its house back in order, … and Samsung took advantage of demand to add a new fab … so, when SK Hynix straightened things out, Samsung’s new fab led to DRAM oversupply and price drops. Ouch #1.
(b) Micron created this cycle by DRAM node transition from 35nm down to 20nm at MULTIPLE fabs: Elpida, Rexchip, and Inotera. Yes, Micron was going to lose money because Micron had to shut down machines and lines to move them to increase spacing; but, that meant less DRAM supply, it meant customers had to scramble for chips out of their own inventories, and out of the spot market. Once the excess was gone, … supply ‘in the channel’ was, and is, “tight.” Prices went up. Ka-ching #1.

See, two different cycles, each with a different history, and different outcomes. Now, the ‘analysts’ are baking the end of this DRAM ‘cycle’ into every article; unfortunately, leaving out material information in the process. We’ve read ‘peak margins’ articles. We’ve read ‘past cycles’ articles. We’ve read, and continue to read boom/bust articles that China wants to build its own DRAM. China tried to BUY (read: STEAL) Micron Tech (MU) ‘cheap’ …  China, by 2025, wants up to 40 percent of the DRAM going into Chinese products to be made in China, by Chinese companies. China has smart, hard working people. The problem with these articles, is that China is late to the DRAM ‘wannabe’ party, so late, the remaining parties: Samsung, SY Hynix, and Micron own and control pretty much all the DRAM intellectual properties (IP). Micron has repeatedly stated it has no intention of licensing its IP to any new ‘wannabe’ player. Will Samsung self destruct and license its DRAM IP to China? … Will SK Hynix self destruct and license its DRAM IP to China? … These survivors, Samsung, SK Hynix, and Micron, survived previous cycles while dozens of ‘wannabe’ players wound up bankrupt.
Case in point: Micron’s bargain purchase of Elpida (with Rexchip) occurred when every other bidder bailed the Elpida bankruptcy because they thought Micron’s bid was ‘over bidding’ insane. Now, Micron has the economy, and luxury, of scale to shift, machines, lines, and even whole fabs to producing the highest margin product over the longest term. Micron shifted PC DRAM to NAND because PC sales were in a lengthy decline. PC sales appear to be stable to returning to growth. PC DRAM prices are up.

  In the first quarter of 2019, Micron begins shipping its QuantX products. From Micron’s Financial call, we learned Intel (INTC) is picking up $500 MILLION of Micron’s share of the IMFT’s expenses (an increase to Micron’s debt, offset by $300 million in debt Micron retired … so, net debt increased by $200 Mil).
IMHO, Intel needs more 3D Xpoint (Optane) and more 3D ‘floating gate’ TLC NAND and the $500 Mil is an Intel/Micron IMFT hint it’s expecting Micron’s addition of cleanroom space to meet those needs. In the meantime, what machines and lines are feeding the 3D Xpoint (Optane/QuantX) NEED = DEMAND? Just the IMFT? IMHO, that is a NO because Micron would have funded its share of the IMFT expenses. Did Micron move machines and lines into every spare inch of empty cleanroom space to build 3D Xpoint … ? If Micron needs less DRAM for its OWN packaged products, like QuantX SSDs, surely converting DRAM machines and lines to QuantX is within Micron’s capabilities. If external DRAM, or NAND, ‘demand’ is soft, but DEMAND for potentially high margin QuantX SSDs picks up, IMHO, Micron won’t hesitate in taking the opportunity to shift machines, lines, and maybe a whole fab to 3D Xpoint.
The opportunity provided to Micron in shifting of machines, lines, and even whole fabs, to the best product for the longest term … means any article arguing about ‘peak margins’ or ‘past cycles’ will be nothing more than a homework fail. As to Micron and ‘peak margins’, Micron is shipping more and more of its chips as packaged products. SSDs are packaged products. Node transitions that reduce expenses, will contribute to margin maintenance, or even margins expansion, of ‘packaged’ Micron products.
Lastly, the China DRAM hype, sorry without DRAM IP, China’s DRAM production ‘wannabe wishing’ is speculative and, IMHO, stock price manipulative hype. SHOW ME China has licensed, or lawfully acquired, the DRAM IP it needs.  Plus, Micron and Intel are showing us that DRAM is going the way of the dinosaurs. Micron has been talking about 3D Xpoint, RERAM, and “new memory’ (“new memory” since Feb of 2017 … more than a year ago). By 2025, how much of Micron’s production will be 3D Xpoint for Optane/QuantX versus DRAM? How much of Micron’s production will be RERAM, “new memory”, or, some other memory that we haven’t learned of … yet? Those capable of doing ‘Scenario Analysis’ have many, many, MANY, clues.
Its your money, PLEASE listen to Micron’s (and Intel’s) conference calls. You’ll be glad you did.

 

Note and Disclaimer: As I ran my end-of-day (EOD) Micron Tech (MU.O) Daily, Weekly, Monthly, (d-w-m) Micron Tech chart analysis Sunday, April 22d, 2018, I thought you might like to review my notes above and below regarding Micron’s potential trading thru this Friday the 27th, the last of the month of April 2018 …

This is a Bull/Bear, PROs, and CONs, Buy–Hold–Sell–Short (BHSS) chart analysis with the same capital conserving cautionary and pull back suggestions, as well as the occasional ‘contrarian’ bullish suggestions I have learned to appreciate and use to manage my investments with the Reward/RISK, or RISK/Reward Ratio.
Where appropriate, I add information from my databases, spreadsheets, as well as my notes from conference calls and articles. As I own shares of Micron Tech, I want to know the good, the bad, and the ugly, the buy–hold–sell–short because it’s my money. I write this analysis myself, it is MY homework, and I am not paid, or seeking to be paid for sharing this analysis. I hope that sharing my homework, comments, notes and opinions helps you with your investment homework.

 

mu20180420d2

Chart 1: Micron Tech, Daily, EOD, O-H-L-C CandleVolume thru Friday’s close
Chart Annotation Key: Right side, listed bottom to top, the above chart incorporates the Daily chart (#2) analysis numbers listed (as ‘was’) below:
Le = “If Long, exit all contracts at: $47.26
ST rally = ” … short term price rally back to the $52.86 (was 53.05) area.”
p-profit = “look to take partial profits on any retracement to $54.27 (was $53.50).”
CCS = (if short) suggested ” …capital conserving stops in the region of $54.87 (was $58.80)”
Se = “If Short, exit all contracts at: $54.27 (was $61.72)”

 

mu20180420d

Chart 2: Micron Tech, Daily, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2).

Analysis of Micron’s Daily chart activity through Friday’s (4/20/2018) close: $50.62

The current Daily chart trend is down and all orders on the short side may be considered. If already holding short positions, look to take partial profits on any retracement to 54.27. Traders with remaining short positions, after profit taking, should consider placing capital conserving stops in the region of $54.27. Be prepared for a potential short term price rally back to the $52.86 area.
Suggested placement of capital conserving stops…
If Long, exit all contracts at: $47.26
If Short, exit all contracts at: $54.27

Additional Daily chart info:

*Relative Strength Index (RSI) 46.1625 pulling back from 55.09 on 4/18/2018 …
*Currently the Moving Average Convergence Divergence (MACD) for Micron’s Daily chart is bearish since it is trading below its signal line. The MACD crossed below its signal line 19 trading days ago. Since Micron’s MACD crossed below its moving average, MICRON’s price has decreased 6.62%, and has ranged from a low of $47.26 to a high of $58.80. Micron’s MACD is not in an Overbought/Oversold range and there have been no divergence signals within the last 5 periods.
MACD Value: -0.246
Signal Line: -0.137

Micron Daily chart trend observations …

  • Overall, the bias in Daily chart prices is: Downwards.
  • Short term: Prices are stalling.
  • Intermediate term: Prices are trending.

 

Micron Daily chart projected targets (thru 4/30/2018)

  • The upper projected target is: $55.94.
  • The lower projected target is: $45.64.
  • The projected closing price is: $50.79.
  • Note: the above Daily price projections are for reference only as Mr. & Ms. Fickle Markets can exceed these projections up, or down, on any given day.

 

mu 20180420sma-d

Chart #3 Micron Tech, Daily, EOD Simple moving averages

Daily as of 4/20/18
SMA3 = 52.02
SMA9 = 51.75
SMA20 = 51.64
SMA50 = 51.21
SMA100 = 47.21
SMA200 = 41.67
SMA400 = 32.77

 

mu20180420w2

Chart 4: Micron Tech, Weekly, EOD, O-H-L-C CandleVolume thru Friday’s close

 

mu20180420w

Chart 5: Micron Tech, Weekly, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2).

Analysis of Micron’s Weekly chart activity through Friday’s (4/20/2018) close: $50.62

The current Weekly chart trend is up and all orders on the long side may be considered. If already holding long positions, look to take partial profits on any retracement to $43.90. Traders with remaining long positions after profit taking should consider placing capital conserving stops in the region of $37.52. Be prepared for a potential short term price pull back to the $47.62 area.

Suggested standing placement of capital conserving stops…
If Long, exit all contracts at: $37.52
If Short, exit all contracts at: $63.42

Additional Weeky chart info:

*Relative Strength Index (RSI) 56.3925 pulling back from 58.7895 on 4/13/2018 …
*Currently the Moving Average Convergence Divergence (MACD) for Micron’s Weekly chart is bearish since it is trading below its signal line. The MACD crossed below its signal line Friday 4/20/2018. Since Micron’s MACD crossed below its moving average, MICRON’s price has been unchanged, and has ranged from a low of $50.15 to a high of $54.27. Micron’s MACD is not in an Overbought/Oversold range and there have been no divergence signals within the last 5 periods.
MACD Value: +3.509
Signal Line: +3.527

Micron Weekly chart trend observations …

  • Overall, the bias in Weekly chart prices is: Upwards.
  • Short term: Prices are moving.
  • Intermediate term: Prices are trending.
  • Note: this chart shows extraordinary price action to the upside.

 

Micron Weekly chart projected targets (thru 4/30/2018)

  • Weekly chart note, prices are vulnerable to a correction towards $38.54.
  • The upper projected target is: $59.04.
  • The lower projected target is: $43.10.
  • The projected closing price is: $51.07
  • Note: the above Weekly price projections are for reference only as Mr. & Ms. Fickle Markets can exceed these projections up, or down, on any given day.

 

 

mu 20180420sma-w

Chart #6 Micron Tech, Weekly, EOW Simple moving averages 

Weekly as of 4/20/18
SMA3 = 50.44
SMA9 = 52.05
SMA20 = 46.99
SMA50 = 39.67
SMA100 = 29.65
SMA200 = 26.25
SMA400 = 18.73

 

mu20180420m

Chart 7: Micron Tech, Monthly, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2).

Analysis of Micron’s Monthly chart activity through Friday’s (4/20/2018) close: $50.62
The current Monthly chart trend is up and all orders on the long side may be considered. The current market price activity is Strongly Bullish and suggests favorable trade opportunities on the long side. If already holding long positions, look to take partial profits on any retracement to $26.85. Traders with remaining long positions, after profit taking, should consider placing capital conserving stops in the region of $26.85. Be prepared for a potential short term price pull back to the $39.48 area.

Suggested placement of capital conserving stops:
If Long, exit all contracts at: $22.64
If Short, exit all contracts at: $63.42

Additional Monthly chart info:

*Relative Strength Index (RSI) 75.941 pulling back from 79.25 on 3/29/2018 …
*Currently the Moving Average Convergence Divergence (MACD) for Micron’s Monthly chart is bullish since it is trading above its signal line. The MACD crossed above its signal line 19 trading months ago. Since Micron’s MACD crossed above its moving average, MICRON’s price has increased 184.70%, and has ranged from a low of $16.17 to a high of $63.42. Micron’s Monthly chart MACD in an Overbought range. Prices may continue to move higher for some time. Wait for prices to move lower before considering any short positions. There have been no divergence signals within the last 5 periods.

MACD Value: +7.425
Signal Line: +5.475

Micron Monthly chart trend observations …

  • Overall, the bias in prices is: Upwards.
  • Short term: Prices are moving.
  • Intermediate term: Prices are trending.
  • Note: this chart shows extraordinary price action to the upside.

 

Micron Monthly chart projected targets (thru 4/30/2018)

  • Monthly chart note: prices are vulnerable to a correction towards $29.69.
  • The upper projected target is: $59.80.
  • The lower projected target is: $42.50.
  • The projected closing price is: $51.15.
  • Note: the above Monthly price projections are for reference only as Mr. & Ms. Fickle Markets can exceed these projections up, or down, on any given day.

 

 

 

 

 

 

 

 

 

 

 

Monday, 4/23/2018 thru Friday 4/27/2018 ——

 

  Hope the above MICRON TECH ORD (MU.O) calculations for Monday, 4/20/2018, day, week, and month (d-w-m) of April 2018,  helps your investing and trading planning today …

 

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