MICRON Technology Inc. (MU.O) (d-w-m) for Monday (20180611)

This blog was a summary of my homework for the FED and Quadruple Witching (QW) week of June 11th thru the 15th.  I didn’t get to publish it due to family commitments. scan0001a Now, per requests, I am belatedly publishing this homework as a comparative reference regarding the outlook on Micron Tech, post-QW and pre-Q3’2018 Earnings Report and Conference Call scheduled for after the markets close Wednesday, June 20, 2018.

Hope this helps.

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MICRON Technology Inc. (MU.O) (d-w-m) for Monday (20180611)

MU ….. $61.39 +$1.76 (+2.95%) After Hours: $61.45 +0.06 (+0.10%)
Reg Hrs Vol: 55,262,193 shares After Hrs Vol: 1461184 shares

Sector (GICS®) Information Technology
Industry (GICS®) Semiconductors & Semiconductor Equipment

8000 South Federal Way
Boise, ID 83707 USA
1-208-368-4000   http://www.micron.com
Micron’s Investor Calendar:   http://investors.micron.com/events.cfm

  •                      ———————————

Despite Micron’s improving fundamentals, this week is going to see a plethera of ‘nothing to do with Micron’s fundamentals’ wagging Micron’s pps. Monday, and the next few days, global geo-political RISKS suggest we will see increased volatility as the markets digest the potential fallout from the G7 meeting as it relates to trade. Some of the other ‘tail waggin’ the dog’ items to watch, or at least to be aware of, as it could affect your trading and investing:

The Fed reports every day (see FED calendar):

  • Monday 
  • 9:45 a.m. CP – Commercial Paper
  • 4:15 p.m. H.10 – Foreign Exchange Rates
  • 4:15 p.m. H.15 – Selected Interest Rates
  • Tuesday – 2PM Wednesday, FOMC Two-day meeting, June 12-13 w/Press Conference
  • Wednesday 10:30 AM ET the US EIA reports on Crude (expecting a drawdown)
  • Thursday the US EIA reports on Nat Gas   ( https://www.eia.gov/ )
  • Friday: Quadruple Witching: 3rd Friday of the month options and futures expiry

=======================

“Micron confirms that China’s State Administration for Market Regulation authorities visited Micron’s China sales offices on May 31 seeking certain information,” the Boise, Idaho-based company said in an emailed statement Friday. “Micron is cooperating with Chinese officials.”
Micron Technologies, per its most recent, nearly 4 hour long, May 21, 2018 Analyst Conference, is evolving from a ‘chips as commodities’ company to a ‘packaged’ products company where by 2021, Micron expects to be reduced to selling approximately 20 percent of Micron’s Trade NAND as ‘chips’, implying approximately eighty (80) percent will be ‘packaged NAND’. On page 68 of the presentation slides, Micron went from 21% Trade NAND packaging in 2013 to 39% packaging in 2017 a gain of 18% in 4 years. You will see Micron was selling Trade NAND chips as ‘chips’ 61%, OR at 39% ‘packaging’ for FY2017 and plans to be selling chips as ‘chips’ down to approximately 20% by FY2021 OR at at 80% packaging … This implies Micron is expecting a +100% gain in Trade NAND ‘packaging’ between 2017 and 2021 … (another four year period for comparison sake). …

  I. China’s ‘anti-trust’ investigation is going to have to consider how change is undermining its anti-trust and collusion on chips pricing investigations.
First, technology ‘changed’ from 2D planar NAND to 3D NAND, and is still evolving. As chip manufacturers add more layers to their 3D NAND, those additional layers require more process steps taking more time to finish a wafer … and a LOT more fab floor space, leading to fabs finishing fewer wafers per month. Micron is suggesting its layering process could be functional to 200+ layers. Micron (see page 92) also talked about scaling of its next node 96 layer, CMOS under Array, NAND with floating gate ** and *** charge trap … postulating Micron’s tech could work with 200 plus layers without EUV … (see page 88) and please listen to the Conference. Note: That is the first time I’ve heard that; and, immediately I have cause to question: … just how many 200+ layer wafers could be finished in a month? Hm!
Second, Micron has designed, and is developing products the competition does not have, like 3D Xpoint, that may eat 5% to 10% away at the need, or demand, for DRAM. So, why would Micron with technology to replace DRAM … spend billions, and years, to build already, technically obsolete DRAM fabs? (Something Micron’s competition may also point to … ) Hm!
Third, another point in favor of Micron’s innocense, is the unexpected, unanticipated demand for chips, chip packages, and chip packaged products, coming from new sources, like: (a) Automotive, including selfdriving vehicles, (b) Mobile, (c) Data Center, including cloud companies and companies that want their own cloud storage, (d) Artificial Intelligence (AI), (e) the connected Home, (f) the Internet of Things (IoT), and ( g to z) more … Hm!
SSDs and Servers. Micron’s biggest opportunity for billions of dollars in sales and revenue growth is in data center … being conservative and reasonable which depends on customers embracing FY2018 QLC SSDs, and FY2019 customers embracing QuantX servers (assuming similar to Intel’s 1 terabyte of 3D Xpoint and 30 – 32 terabytes of 3D NAND) and SSDs. IMHO, Micron is taking its time w/3d Xpoint (Micron’s QuantX) because it wants improved satisfactory yield from QuantX wafers and then controllers that put the raw data and then processed data: where it’s supposed to be, … when it’s supposed to be, between CPU/DRAM/QuantX/NAND where the QuantX acts like a cache.

 IMHO, expectations for FY2018: based on 39% packaging for FY2017 from above:
(a) ultraconservative: 39% + 4-8% for FY2018 with 63 to 65% margins, or full FY2018 range: 43 to 47% packaging (leaning to 45% unless QLC takes off … )
(b) conservative: 8 to 11% for FY2018 with 65 to 68% margins, or full FY2018 range: 47 to 50% packaging (leaning to 48% unless QLC takes off … )
Fourth, most of us do not take the time to read Micron’s 10Q’s which provide a lot more financial information … including restrictions on cash, investments, and assets that Micron can not use as collateral to build a new fab … like these:

II. This from Micron’s SEC filed 10Q (FQ2 20170309):
“Restrictions on Net Assets
As a result of the corporate reorganization proceedings the MMJ Companies initiated in March 2012, and for so long as such proceedings continue, the MMJ Group is subject to certain restrictions on dividends, loans, and advances. In addition, the 2021 MSTW Term Loan contains covenants that limit or restrict the ability of MSTW and/or Inotera to distribute cash dividends. Also, our ability to access the cash and other assets of IMFT through dividends, loans, or advances, including to finance our other operations, is limited and is subject to agreement by Intel. As a result, our total restricted net assets (net assets less intercompany balances and noncontrolling interests) as of March 2, 2017 were $3.38 billion for the MMJ Group, $2.80 billion for MSTW and Inotera, and $894 million for IMFT, which included cash and equivalents of $529 million for the MMJ Group, $297 million for MSTW and Inotera, and $94 million for IMFT. “

III. This from Micron’s most recent SEC filed 10Q (FQ2 20180301):
(1) “Restrictions on Net Assets
As a result of the corporate reorganization proceedings of MMJ, the 2021 MSTW Term Loan covenants, and the IMFT joint venture agreement, our total restricted net assets (excluding intercompany balances and noncontrolling interests) as of March 1, 2018 were $3.86 billion for the MMJ Group, $2.54 billion for MSTW and MTTW, and $900 million for IMFT.”

The above information is provided for comparison to that from the q2’2017 10Q …

(2) “Technology Transfer and License Agreements with Nanya Effective December 6, 2016, under the terms of technology transfer and license agreements, Nanya has options to require us to transfer to Nanya for Nanya’s use certain technology and deliverables related to the next DRAM process node generation after our 20nm process node (the “1X Process Node”) and the next DRAM process node generation after the 1X Process Node. Under the terms of the agreements, Nanya would pay royalties to us for a license to the transferred technologies based on revenues from products utilizing the technologies, subject to specified caps, and we would also receive an equity interest in Nanya upon the achievement of certain milestones.”
Note: ” … we would also receive an ‘equity interest’ in Nanya upon the achievement of certain milestones ….

Conclusion: IMHO, anyone arguing, including China, the courts, the banks, and/or the stock market … can ignore Micron’s SEC filed 10Q info above (when I didn’t) need an education in FINANCE … as well as what constitutes ‘reasonable doubt’.  Micron is much better off due to expanding demand coming from multiple sources, besides PCs and mobile, which, besides node transitions and adding additional layers, is another factor pressuring supply which is pushing DRAM prices higher. Those suggesting Micron is colluding because it is, of necessity, PRUDENTLY managing its FINANCIALS … and not building fabs to produce DRAM when Micron has DEMONSTRATED product in the pipeline that will REPLACE DRAM … well, I’d like to be on that jury to hear that alledged E-V-I-D-E-N-C-E …

Note Micron’s Board has authorized $10 BILLION for share buyback beginning in FY2019.

Before we get to the charts, let’s take a peek at info from my databases and spreadsheets:
PivotPoint, with Supports (s1, s2) and Resistances (r1, r2) calculated for the noted
trading day from MySpreadsheets ( C ) vs, the close for that date:

Date,        Pivot pt,   s1,       s2,         r1,          r2,     Close
6/4/2018, 58.320, 57.300, 55.860, 59.760, 60.780, 59.10
6/5/2018, 58.293, 57.427, 55.753, 59.967, 60.833, 59.41
6/6/2018, 59.460, 58.780, 58.150, 60.090, 60.770, 59.42
6/7/2018, 59.103, 58.617, 57.813, 59.907, 60.393, 59.63
6/8/2018, 59.487, 58.703, 57.777, 60.413, 61.197, 61.39
6/11/2018, 60.403, 59.207, 57.023, 62.587, 63.783, _____

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Note: Micron Technologies (In Index: NASDAQ 100® S&P 500®) closed Friday 6/8/2018, up, +$1.903 above its Pivot Point of 59.487 (positive), above its supports (s1, s2) (positive), and above its Resistances (r1, r2) (positive) for Friday and MU’s second day which is Monday.  BUT, Micron kept closing BELOW Resistance r1 …. until Friday (negative). Hm!
*** At this time, the Monday pre-market NASDAQ E-mini futures are negative and Fair Value is also negative … suggesting a negative Open for Monday’s US Nasdaq Index stocks is probable …  Micron, a Nasdaq 100 Index stock may see a negative open as well.

 

===== News =====
Mar 22, 2018 , 4:30 PM ET, Micron’s Second Quarter 2018 Financial Call
May 21, 2018 , 1:30 PM ET, 2018 Micron Analyst and Investor Event

Presentation slides (PDF)

May 31, 2018 , 1:00 PM ET, Bernstein Thirty-Fourth Strategic Decisions Conference 2018
Speaker: Sanjay Mehrotra, President & CEO

Jun 20 MU to announce Q3’2018 earnings (Confirmed)

 

  • —————-

This is a Bull/Bear, PROs, and CONs, BuyHoldSellShort (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 buyholdsellshort 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.
… and now to the charts (Note: I do have additional info to add) :

 

MU 20180608d2

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 below:
⦁ Le = “If Long, exit all contracts at: $52.85
⦁ ST rally = ” … short term price rally/pull back to the $57.45 area.”
⦁ p-profit = “look to take partial profits on any retracement to $56.62
⦁ CCS = (if short) suggested ” …capital conserving stops in the region of $56.62
⦁ Se = “If Short, exit all contracts at: $64.66

————————————–

MU 20180608d

Chart 2: Micron Tech, Daily, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2).  Note: when spreads widen between support and resistance, Micron’s pps tends to decline.  When spreads narrow, Micron’s pps rallies.

Analysis of Micron’s DAILY chart activity through Friday’s (6/8/2018) close at $61.39
LONG. The current 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 56.62. Traders with remaining long positions, after profit taking, should consider placing capital conserving stops in the region of 56.62. Be prepared for a potential short term price pull back to the 57.45 area.

Suggested placement of capital conserving stops:
If Long, exit all contracts at: $52.85
If Short, exit all contracts at: $64.66

Additional Daily chart info:

(1.a) On the EOD daily chart basis, the Moving Average Convergence Divergence (MACD) for MICRON Technology Inc. (MU.O) is bearish since it is trading below its signal line. The MACD crossed below its signal line 2 trading days ago. Since the MACD crossed below its moving average, MICRON TECH ORD’s price has increased 3.32%, and has ranged from a low of $58.22 to a high of $61.60. The MACD is not in an Overbought/Oversold range. There have been no divergence signals within the last 5 trading days.
MACD Value: +2.148        Signal Line: +2.193

(1.b) Friday’s (6/8/2018) Relative Strength Index (RSI) for MU was 63.877 up from last Friday’s 58.072.   The RSI calculations are based on the Close over a 14 trading day period.

(1.c) Micron’s On Balance Volume (OBV) is a positive 21327016. Micron’s OBV is in a clear uptrend and broke above the up channel it was trending in.

Micron Daily chart trend observations …

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

Micron Daily chart projected targets (thru 6/20/2018)

  • Note, prices are vulnerable to a correction towards 54.30.
  • The upper projected target is: $66.70.
  • The lower projected target is: $56.47.
  • The projected closing price is: $61.59.
  • Note: the above DAILY chart price projection ranges are for reference only, and can be easily exceeded by Mr. & Ms. Fickle Markets.

 

MU 20180608smad

Chart 3:  Daily, Simple Moving Averages (SMA)  …. includes Daily/Weekly tables

(1.f) DAILY chart Simple Moving Averages (SMA)
The 3 period Simple Moving Average (sma3) at 60.15 is in an uptrend.
The 9 period Simple Moving Average (sma9) at 60.05 is in an uptrend.
The 20 period Simple Moving Average (sma20) at 58.06 is in an uptrend.
The 50 period Simple Moving Average (sma50) at 53.11 is in an uptrend.
The 100 period Simple Moving Average (sma100) at 50.81 is in an uptrend.
The 200 period Simple Moving Average (sma200) at 45.75 is in an uptrend.
The 400 period Simple Moving Average (sma400) at 35.89 is in an uptrend.

—————–

MU 20180608w

Chart 4: Micron Tech, Weekly, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2).  Weekly Note: when spreads widen between support and resistance, Micron’s pps tends to decline.  When spreads narrow, Micron’s pps rallies.  
Analysis of Micron’s WEEKLY chart activity through Friday’s (6/8/2018) close at $61.39
LONG. The current 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 45.32. Traders with remaining long positions, after profit taking, should consider placing capital conserving stops in the region of 45.32. Be prepared for a potential short term price pull back to the 50.29 area.

Suggested placement of capital conserving stops:
If Long, exit all contracts at: $45.32
If Short, exit all contracts at: $64.66

Additional Weekly chart info:

  • 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.

Weekly chart price projections (thru 6/29/2018):

  • Note, weekly prices are vulnerable to a correction towards 40.55.
  • The upper projected target is: $70.89.
  • The lower projected target is: $53.08.
  • The projected closing price is: 61.98.
  • Note: the above DAILY chart price projection ranges are for reference only, and can be easily exceeded by Mr. & Ms. Fickle Markets.

MU 20180608smaw

Chart 5:  Weekly, Simple Moving Averages (SMA) …. includes Weekly/Daily tables

(2.f) Weekly chart Moving Averages
The 3 period Simple Moving Average (sma3) at 60.49 is in an uptrend.
The 9 period Simple Moving Average (sma9) at 53.85 is in an uptrend.
The 20 period Simple Moving Average (sma20) at 50.97 is in an uptrend.
The 50 period Simple Moving Average (sma50) at 43.10 is in an uptrend.
The 100 period Simple Moving Average (sma100) at 32.59 is in an uptrend.
The 200 period Simple Moving Average (sma200) at 27.03 is in an uptrend.
The 400 period Simple Moving Average (sma400) at 19.56 is in an uptrend.

———————–

MU 20180608m

Chart 6: Micron Tech, Monthly, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2). Monthly Note: when spreads widen between support and resistance, Micron’s pps tends to decline.  When spreads narrow, Micron’s pps rallies.   Monthly Note 2: Note the formation of “the CLAW” suggesting a major move (up or down) is coming … so, more homework is required.

Analysis of Micron’s MONTHLY chart activity through Friday’s (6/8/2018) close at $61.39
The current 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 37.52. 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 42.92 area.

Suggested placement of capital conserving stops:
If Long, exit all contracts at: $26.36
If Short, exit all contracts at: $64.66

Additional Monthly chart info:

  • 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.

Monthly chart price projections:

  • Note, prices are vulnerable to a correction towards 31.70.
  • The upper projected target is: $72.34.
  • The lower projected target is: $51.85.
  • The projected closing price is: 62.10.
  • Note: the above DAILY chart price projection ranges are for reference only, and can be easily exceeded by Mr. & Ms. Fickle Markets.

 

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—  Monday, 6/11/2018 thru QW Friday 6/15/2018  ——

 

  Hope the above MICRON TECH ORD (MU.O) calculations for Monday, 6/11/2018, day, week, and month (d-w-m) of June 2018,  helps your investing and trading planning today …

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