MICRON Technology Inc. (MU.O) (d-w-m) for Monday (20180813)

Updated 8/13/2018 – 8/17/2018: Added Daily Pivot Point, Support, and Resistance Section.  These numbers will be updated every day in my blog as we head into third Friday of the month options expiry this Friday (8/17/2018).  Note: It’s not too soon to start thinking about Quadruple Witching expiry Friday (9/21/2018).   Hmework in progress and more to add. 

 

The Technology Sector has become the target of analyst and investor concerns as global trade, growth, and company long term planning teeters on the brink due to geopolitical RISKS, including U.S.A. sanctions against Russia, Iran, Turkey, et cetera, and escalating trade tariffs tiffs threaten Canada, Mexico, the European Union, and especially China with a potential trade war.  The U.S. Congress, in a bi-partisan agreement, is targeting Russia’s U.S.A. election meddling with “hit’em in the wallet” sanctions that could set back Russia’s exploration and production of natural gas and crude by depriving Russia of critical parts.  Global markets in stocks, bonds, currencies, and commodities are volatile while the U.S.A. markets appear to be in a trading range, treading water, hoping for favorable outcomes as evidenced by the Volatility Index (VIX) barely budging.

Reportedly, the two hundred or so U.S. companies currently doing  ‘partnership’ manufacturing in China, due to tariffs, are shifting some of their production to their existing locations outside China.   If that doesn’t get China’s attention, the next message China needs to consider is that the U.S.A. Congress’ sanctions to deprive Russia of critical crude production components is short to intermediate term cause for concern that the U.S.A. Congress will plan similar “hit’em in the wallet” sanctions against China for forced partnerships and technology transfers, intellectual property theft from U.S. companies, and hacking espionage of U.S.A. government and U.S. industrial and technology companies.  This suggests China could see the U.S. Congress limit, or terminate, access to Intel (INTC) chips, American Micro Devices (AMD) chips, Qualcomm (QCOM) chips, Micron Technologies (MU) chips, et cetera …  The U.S. Congress learned the power of ‘denied technology access’ from China’s ZTE’s ban.  China, reportedly 30% owner of ZTE, should get the ‘denied technology access’ implementation would put tens of thousands of Chinese out of work.  China would then have to go hat in hand, not to President Trump for sanctions relief; but to the U.S. Congress.

U.S.A. companies, and the press, blindly focused on tariffs, are failing to pay attention to China’s ambitions to re-acquire Taiwan, by force if necessary, as well as China’s militarized island building ambitions regarding the South China Sea.  Scenario analysis suggests a U.S.A/S.Korea/N. Korea ‘resolution’ is but a pawn in China’s ambitions to move, or reduce, U.S.A. forces and weapons out of South Korea and out of Japan .… The threat of a China vs U.S.A. military conflict supports the secondary objective of the tariffs vs. China which is to economically force U.S.A companies to permanently shift production supply out of China and back to the U.S.A. before a shooting war starts.

The question is not if, but when will Russia and China get the message that their continuing bad behavior can back fire with U.S.A voters … not against President Trump, not against the Republicans, or Democrats, running for re-election in the midterms, but against them?

Micron’s Fundamentals

Away from the geopolitical RISKS, Micron’s fundamentals are still improving.  August 1st, Fitch upgraded Micron to BBB-.   In the table below, comparing Micron versus the. Semiconductors & Semiconductor Equipment Industry shows Micron Tech outperforming its peers.  Note that many of the companies Micron is outperforming have a lower annualized Beta. More importantly, on a trailing twelve months P/E basis, 96 percent of Micron’s Semiconductors & Semiconductor Equipment competitors have a better trailing twelve-month P/E.      Sell side analysts, the markets, investors and traders, are ignoring Micron’s fundamentals, arguing and waiting (and failing) quarter after quarter, for Micron to (a) hit ‘Peak Margins’, and (b) to succumb to ‘cycles’ wherein demand for chips falls off.

First, analyst doom and gloom arguments for their view of Micron hitting Peak Margins, is flawed in that Micron, for the most part, does not compete with its customers, and is focused on every packaging opportunity.  Packaging is the process of Micron listening to its customers and offering multiple Micron chips as a ‘packaged’ product.  Packaged products carry higher margins for Micron while still saving Micron’s customers money.   Second, analyst arguments for a repeat of past ‘cycles’ is like comparing a single apple to multiple apples, or multiple oranges.  Before Micron, as sponsor, acquired Elpida (and Rexchip) out of bankruptcy, Micron’s ‘cycles’ were boom/bust tied to PCs.  The current cycle includes only 20% exposure to PCs, with Micron selling packages and chips to the Internet of Things (IoT), the many manufacturing and consumer Cloud storage, data center, artificial intelligence, automotive, and more.  Micron has the scale it did not have in previous ‘cycles’ to shift lines and whole fab production to the products that offer the best long-term sales, revenues, margins, and free cash flow.

This scenario analysis suggests Micron’s future is on a path away from selling chips as commodities to the path of product sales, … not unlike that of Nvidia (NVDA).

 

Compare:        Industry Average & Percentile Methodology

(MU)  Industry Comparison:      Vs. Semiconductors & Semiconductor Equipment

Micron (MU) Industry Average Percentile
in Industry
Market Capitalization $60.65B $21.63B 95th
Total Return (1 Year Annualized)
as of 8/1/2018
+84.51% +26.38% 100th
Beta (1 Year Annualized) 1.59 1.21 80th
EPS (TTM)
as of 5/31/2018
$9.95 $4.63 99th
Current Consensus EPS Estimate
EPS Growth
(TTM vs. Prior TTM)
+358.53% +76.61% 97th
P/E (TTM)
as of 8/1/2018
5.26 21.37 4th
Dividend Yield (Annualized)  n/a
Total Revenue (TTM)
as of 5/31/2018
$28.09B $23.26B 99th
Revenue Growth
(TTM vs Prior TTM)
+61.42% +20.32% 97th
Shares Outstanding 1,159,811,000 1,888,048,512 96th
Institutional Ownership 77.73% 73.62% 54th

MICRON Technology Inc. (Nasdaq: MU.O)

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

 

  Micron’s Technical Analysis

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 (or bearish) 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.

… and now to the charts (Note: I do have additional info to add) :

 

MU 20180810d

Chart 1: 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, the suggestion is Micron’s pps rallies.

(1)  Analysis of DAILY chart activity through Friday’s (8/10/2018) close at $51.37

    The current MU daily chart trend is down and all orders on the short side may be considered.  The current market price activity  is Strongly Bearish and suggests favorable trade opportunities on the short side.  If already holding short positions, look to take partial profits on any retracement to 54.22. Traders with remaining short positions after profit taking should consider placing capital conserving stops in the region of 54.74.  Be prepared for a potential short-term price rally back to the 53.82  area.

   Suggested placement of capital conserving stops:

  If Long, exit all contracts at:     $51.02

  If Short, exit all contracts at:     $55.40

 

 MU 20180810w

 Chart 2: Micron Tech, Weekly, 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. 

(2)  Analysis of WEEKLY chart activity through Friday’s (8/10/2018) close at $51.37

  The current 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 50.10.   Traders with remaining long positions, after profit taking, should consider placing capital conserving stops in the region of 50.10.

  Be prepared for a potential short-term price move back to the 51.56  area.

   Suggested placement of capital conserving stops:

  If Long, exit all contracts at:     $45.32

  If Short, exit all contracts at:     $64.66

 

 MU 20180810m

 Chart 3: Micron Tech, Monthly, 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.  Also note the “Claw” formation suggestion Micron is about to make a move …. up? or down? requires more homework.  

(3)  Analysis of MONTHLY chart activity through Friday’s (8/10/2018) close at $51.37

    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 31.65.   Be prepared for a potential short-term price pull back to the 42.38 area.

   Suggested placement of capital conserving stops:

  If Long, exit all contracts at:     $26.85

  If Short, exit all contracts at:     $64.66

 

  Pivot Point, Support, and Resistance Info

If Micron’s pps is above the Pivot Point, the market is Bullish and the Pivot point is also Support.  If Micron’s pps is below the Pivot Point, the market is Bearish and the Pivot Point is Resistance.  Friday (8/17/2018) is third Friday of the month options expiry.  

 (1) As to Micron for Monday (8/13/2018):  Micron’s Pivot Point is $51.447. At this time E-mini futures suggest a negative market open for the DOW, the Nasdaq, the S&P500, and the Russell. Micron is a component of the S&P500 and the Nasdaq 100. So, a negative open for the US markets suggest a negative open for Micron. Support (s1) is $50.943. Support (s2) is $50.517. Should Monday’s intraday trading turn around … Micron’s Resistance (r1) is $51.873. Micron’s Resistance (r2) is $55.363.

Note 1: the last time Micron’s intraday high pps bested Resistance (r2) was 7/13/2018 with Micron’s Intraday High failing to best Resistance (r2) over the last 20 trading days. 

(2) As to Micron for Tuesday (8/14/2018): From the pre-market activity, (at this time) the DJIA, the Nasdaq, The S&P500, and the Russell e-mini futures are all in the green. Micron also appears heading for a positive open based on improvements in yesterday’s numbers. Monday Recap: Micron closed down -$0.03 at $51.34. Micron’s intraday Low was a positive +$0.327 above Support (s1) and a positive +$0.753 above Support (s2). Micron’s Intraday High was a positive +$0.187 above Resistance (r1). Though Micron’s Intraday High failed once again to best Resistance (r2) at negative -$0.317; that was a positive improvement versus Friday’s negative -$1.317.
Micron’s Pivot Point for today’s trading is $51.557. Support (s1) is $51.053. Support (s2) is $50.757. Today, we are looking for Micron to test Resistance (r1) at $51.843 and Resistance (r2) at $52.347.

(3)  As to Micron for Wednesday (8/15/2018):  Tuesday Recap: Micron closed at $50.62 down -$0.72 or a negative 1.4 percent and a negative $0.938 below its Pivot Point.  Contributing factors to the Micron selloff were (a) threats by Turkey to retaliate against U.S. sanctions by actions against Apple Inc.’s iPhone and U.S. technology. Turkey’s problems are a result of the apparent politically motivated incarceration of U.S. citizens; and (b) old news from SEC filings, i. e .  Einhorn’s Greenlight Capital, reportedly having lost 19% in the first seven months in an UP market  also cut its stake in Micron (MU -0.5%) by 92% to 275,500 shares.  Hedge funds have sold … and bought back Micron in the past …. For every share sold … someone is a buyer.  Micron is down -$14.04 from its 52-week high of $64.66, or -21.714%. Micron’s Intraday Low was a negative -$1.046 below (s1) and a negative -$0.762 below (s2).  Micron’s Intraday High was a negative -$0.072 below Resistance (r1) and a negative -$0.573) below Resistance (r2).

For Wednesday, Micron’s Pivot Point is $50.80.  Micron’s Support (s1) is $49.831 and Support (s2) is 49.041.  Micron’s Resistance (r1) is $51.59 and Resistance (r2) is $52.559.

(4)  Micron for Thursday (8/16/2018): Wednesday Recap: Micron closed Wednesday at $47.49 down -$3.33 or down -6.18 percent.  The close was -$3.31 below the Pivot Point (negative).  Wednesday Micron’s Intraday Low was -$2.691 below Support (s1) (negative) and -$1.901 below Support (s2) (negative).  Micron’s Intraday High was -$1.73 below Resistance (r1) (negative) and -$2.699 below Resistance (r2) (negative).

 Micron’s Pivot Point for Thursday is $48.163.  Micron’s Support (s1) is $46.467 and Support (s2) is $45.443.  Micron’s Resistance (r1) is $49.187 and Resistance (r2) is $50.883.

(5)  As to Micron for Friday (8/17/2018): Thursday Recap: Micron closed Thursday’s trading at $47.10 down -$0.39 or -0.82 percent. The close was -$1.063 below the Pivot Point (negative). Micron’s Thursday Intraday Low was +$0.497 above Support (s1) (positive) and +$1.521 above Support (s2) (positive).  Micron’s Thursday Intraday High was -$0.877 below Resistance (r1) (negative) and -$2.573 below Resistance (r2) (negative).

Micron’s Pivot Point for third Friday of the month expiry is $47.458.  Micron’s Support (s1) is 46.606 and Support (s2) is 46.112.  Micron’s Resistance (r1) is $47.952 and Resistance (r2) is 48.804.  Note: Nvidia reported weak forward revenue guidance which is weighing on NVDA and Micron in pre-market trading at this time.  

This Week’s Recap (at this time):  Clearly Micron (at this time) has made no statements to undermine Sales, Revenues, Earnings, margins, et cetera; which, if there were a material impact, one would presume we would have seen a statement to that impact …. Therefore, this week’s trading trading is not about what is but what the shortterm minded geopolitical RISKs nervous nellies might be thinking it is =  “Uncertainty”.  Perhaps Micron is using this melt down to buy back debt cheap … and maybe even a few shares …. guess we’ll find out if there is a Micron pre-earnings announcement.

 

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

—  Monday, 8/13/2018 thru Friday 8/17/2018  ——

 

  Hope the above MICRON TECH ORD (MU.O) calculations for Monday, 8/13/2018, day, week, and month (d-w-m) of August 2018,  helps your investing and trading planning today …

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