MICRON Technology Inc. (MU.O) (d-w-m) for Monday (20180827)

 

 Updated 8/31/2018: For the last trading day in August: Friday’s numbers, see the Daily Pivot Point, Support, and Resistance Section below.  These numbers will be updated every day this week as we head into  Friday 8/31/2018.

Dates to watch: (a) Monthly options expiry Friday (8/31/2018).  (b) 9/20/2018, Micron’s Q4’2018 and yearend earnings report and after-hours Financial Call.  (c) It’s not too soon to start thinking about Quadruple Witching expiry Friday (9/21/2018).  Homework in progress and more to add.

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 I extend my sympathies to the family and friends of Veteran and Senator John McCain.  I thought he would have been a good, possibly great President in this unending war on terrorism.  I also think his bi-partisan efforts might have gone a long way to fixing some of the things that Congress has yet to work out.  He’ll be long remembered and missed.  

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News

“Micron Technology, Inc., (NASDAQ:MU) today announced plans to invest $3 billion by 2030 to increase memory production at its plant in Manassas, Virginia, creating 1,100 new jobs roughly over the next decade.”  ( for the rest of the story …

 

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Last Friday, Micron Tech closed at $50.70 up one dollar (+1.00) or +2.01 percent. Year to date, Micron is up 23.30 percent.  Friday Recap: Micron’s Close was +$0.92 above its Pivot Point for Friday (positive). Micron’s Intraday Low was +$0.60 above its Support (s1) (positive) and was +$0.98 above its Support (s2) (positive). Micron was +$0.660 above Resistance (r1) (positive) and was +$0.200 above Resistance (r2) (positive).  This was the third 5 by five positive trading day performance of the week, performance we haven’t seen since May 16th, 2018 before profit taking heading into expiry Friday 5/18/2018 removed -$3.11 from Micron’s pps over the course of two trading days.  Despite the 5/17 – 5/18/2018 pullback Micron still managed a 3rd Friday expiry close to 3rd Friday expiry close, one trading month, April to May gain of +$2.77.
    Monday begins the last week of trading in August 2018 with expectations of increased volatility as we head into Monthly options expiry on Friday.  Micron’s numbers for Monday’s trading: Micron’s Pivot Point is $50.48. Micron’s Support (s1) is $50.14. Micron’s Support (s2) is $49.58. Micron’s Resistance (r1) is $51.04 and Resistance (r2) is $51.38.Micron’s close at $50.70 is already +$0.22 above its Pivot Point for Monday (positive).

 

 Outlook for NAND and DRAM:   As I have pointed out in my comments elsewhere, we are seeing more products (and advertisements), for one terabyte ready cell phones.  … has anyone seen the Samsung TV advertisement for Galaxy 9 …advertised as ‘ready for’ One Terabyte of memory …. whether you like Google search, or Microsoft’s Bing … try searching for: ” Cell phones with 1 terabyte of memory “.  Plus both Verizon and now AT&T are advertising Buy 1 Galaxy 9 get one free.  Sorry, you’ll have to go to their ads for more info.
IMHO, what the Sell side analysts have failed to adjust their models for is FOMO, or ‘Fear of Missing Out’ in that Samsung competes with its customers. So, what?  Well, if a Samsung DRAM/NAND customer thinks a 1 Terabyte Galaxy 9 will steal their sales …. then they will be FORCED to design, build, and offer for sale, a 1 Terabyte phone; but, ‘they’ will then inspire their own competitors to add MORE memory because of FOMO. So, Samsung starts the DRAM/NAND snowball rolling down the mountain …. and Micron will benefit too, as Micron customers, competing with Samsung … thanks to FOMO, order MORE memory. Yes, there may be a pullback in demand for mobile gadgets, but the expected pullback in NAND and DRAM may be less than analysts expect as, thanks to FOMO, as the DRAM/NAND content in devices manufactured goes up.  The snowball … becomes an avalanche. Sell side analysts at the bottom of the mountain get buried by the avalanche they didn’t see coming.

A couple of other things analysts fail to acknowledge is that Samsung, as a manufacturer and a competitor, has a huge cost advantage over its customers with an incentive to include more DRAM and NAND in its devices to inspire Samsung  customers to keep up by adding DRAM and NAND to their gadgets … Think of the memory demands, both DRAM and NAND,  imposed by ever improving front and rear facing cameras for pictures, taking videos, and more. The current advance and pace of technological change is not unlike the races at Daytona; but, altered, so every car in the race that fails, or crashes, can be replaced with a better, more improved car, … and oh yeah, in that scenario, there is never going to be a finish line win.

IMHO, we’ll see 2 Terabytes in gadgets, including cell phones, sooner than later (2019 – 2020), and I can’t see the Apple Inc. (AAPL) iPhone sitting back at 256GB much longer.

Thanks to FOMO, I expect margins to (a) pullback less than sell side analysts expect as node transitions reduce costs, allowing average selling prices (ASPs) to decline (IMHO, also less than sell side analysts expect) (b) offset as DRAM/NAND content in more and more gadgets increases.

 

Interesting that Micron is holding its Conference Call after regular hours trading ends the day before Quadruple Witching Expiry.   Long?  Short?  To wait, or not to wait, to close open options and futures …. that is the burning question.  

 

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  Micron’s Technical Analysis

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 (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 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.

If you missed it, please see my last two blog posts for geo-political RISKS comparison numbers, trend, and additional information which will not be boringly repeated below, like Micron’s Expiry close to Expiry close performance.

 

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

 

  By the numbers, This week vs. Last week:   despite unpredictable President Trump’s tweets, despite the FED’s recent two day Jackson Hole, WY meeting confirming  raising rates two more times this year, despite China tariffs being ramped … This week’s suggestions on taking partial profits, using capital conserving stops (CCS), and pull back numbers are either unchanged or suggesting higher prices.  These are Contrarian Investing suggestions signaling a change could be, or is, developing.

 

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mu 20180824d1

Chart 1: Micron Tech, Daily, EOD, O-H-L-C Candle Volume thru Friday’s close

Chart #1 Annotation Key: Right side, listed bottom to top, the above chart incorporates the Daily chart analysis numbers listed below:

 

  • Lx = “If Long, exit all contracts at: $45.62”
  • ST pullback = ” … short term price pullback to the $50.47 area.”
  • p-profit = “if Short look to take partial profits on any retracement to $51.77”
  • CCS = (if Short) suggested ” …capital conserving stops (CCS) in the region of $52.85
  • Sx = “If Short, exit all contracts at: $53.53”

 

Note the primary Channel, thru Friday’s (8/17/2018 Close, in the above chart is 116 trading days with a slightly negative slope of -0.010629.

 

 

mu 20180824d

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, the suggestion is Micron’s pps rallies.

 

  • (1) Analysis of DAILY chart activity through Friday’s (8/24/2018) close at $50.70

Be prepared for a potential short-term (ST) price pull back to the $50.47 area.   Micron’s 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 (p-profit) on any retracement to $51.77. Traders with remaining short positions, after profit taking, should consider placing capital conserving stops (CCS) in the region of $52.85.

Suggested placement of capital conserving stops (CCS):

  If Long, exit (Lx) all contracts at:     $45.62

If Short, exit (Sx) all contracts at:     $53.53

 

 

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 bullish since it is trading above its signal line. Micron’s MACD crossed above its signal line Friday.  Since the MACD crossed above its moving average, MICRON TECH ORD’s price has been unchanged, and has ranged from a low of $49.92 high to a of $50.82.  The MACD is not in an Overbought/Oversold range.  There have been no divergence signals within the last 5 trading days.

MACD Value:  -1.232        Signal Line:  -1.334

 

(1.b) Friday’s (8/24/2018)  Relative Strength Index (RSI) for MU was 46.5589 up from Friday’s (8/17/2018) 25.7756.   The RSI calculations are based on the Close over a 14-trading day period.

Note: other Momentum indicators generated ‘buy’ signals last week:  The Stoch on (8/20/2018), the CCI on (8/21/2018), and as noted above, the MACD on (8/24/2018)

 

mu 20180824obv

 (1.c) Micron’s On Balance Volume (OBV) is a positive 17328150.0, up from last week’s,  but declining.  Micron’s OBV is in an uptrend channel.

1.d  Daily Chart  Trend Info

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

 

  1. e  Daily Chart Price Projections
  • · Note:  prices are vulnerable to a correction rally towards $52.48.
  • ·         The upper projected Target is: $54.34.
  • ·         The lower projected Target is: $46.72.
  • ·         The projected closing price is: $50.53. 

 Note: the above DAILY chart price projection ranges are for reference only and can be easily exceeded by Mr. & Ms. Fickle Markets.

mu 20180824smad

(1.f) DAILY chart Moving Averages

  • The 3 period Simple Moving Average (sma3) at 50.2133 is in an uptrend.
  • The 9 period Simple Moving Average (sma9) at 48.9967 is in a downtrend.
  • The 20 period Simple Moving Average (sma20) at 50.967 is in a downtrend.
  • The 50 period Simple Moving Average (sma50) at 53.4956 is in a downtrend.
  • The 100 period Simple Moving Average (sma100) at 53.6413 is in a downtrend.
  • The 200 period Simple Moving Average (sma200) at 50.1539 is in an uptrend.
  • The 400 period Simple Moving Average (sma400) at 40.4229 is in an uptrend.

 

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  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.

(1) See Friday’s Recap and Monday’s numbers in the above remarks.

(2) Monday Recap:  Micron closed Monday (8/27/2018) at $52.07, up +$1.37, or plus 2.7 percent.  Micron’s Close was a positive +$1.59 above the Pivot Point.  Micron’s Intraday Low was a positive +$1.03 above Support (s1) and a positive +$1.59 above Support (s2). Micron’s Intraday High was a positive +$1.41 above Resistance (r1) and a positive +$1.07 above Resistance (r2). 

 As to Micron for Tuesday (8/28/2018): Micron’s Pivot Point is $51.897.  Micron’s close at $52.07 is already above the Pivot Point … another positive for Tuesday’s trading.  Micron’s Support (s1) will be $51.343 and Support (s2) will be $50.617.  Micron’s Resistance (r1) will be $52.623 and Resistance (r2) is $53.177.  At this time, Micron is up in pre-market trading. 

(3) Tuesday Recap:  Micron closed Tuesday (8/28/2018) at $52.34, up +$0.27, or plus 0.52 percent.  Micron’s Close was a positive +$0.443 above the Pivot Point.  Micron’s Intraday Low was a positive +$0.127 above Support (s1) and a positive +$0.853 above Support (s2). Micron’s Intraday High was a negative -$0.063 below Resistance (r1) and a negative -$0.617 below Resistance (r2). 

 As to Micron for Wednesday (8/29/2018): Micron’s Pivot Point is $52.123.  Micron’s close at $52.34 is already above the Pivot Point … another positive for Wednesday’s trading.  Micron’s Support (s1) will be $51.687 and Support (s2) will be $51.033.  Micron’s Resistance (r1) will be $52.777 and Resistance (r2) is $53.213.

(4)  Wednesday Recap:  Micron closed  at $51.83, down $0.51, or -0.97 percent on “Micron Technology, Inc., (NASDAQ:MU) today announced plans to invest $3 billion by 2030 to increase memory production at its plant in Manassas, Virginia, creating 1,100 new jobs roughly over the next decade.”  (for the rest of the story … )  Micron’s Close was a negative +$0.293 below the Pivot Point.  Micron’s Intraday Low was a negative +$0.387 below Support (s1) but a positive +$0.267 above Support (s2). Micron’s Intraday High was a negative -$0.617  below Resistance (r1) and a negative -$1.053 below Resistance (r2).

As to Micron for Thursday (8/30/2018): Micron’s Pivot Point is $51.763.  Micron’s close at $51.83 is already above the Pivot Point … this is Pivot Point also the “p-profit = “if Short look to take partial profits on any retracement to $51.77” battle ground we’ve been watching between the Bears and the Bulls this week so two positives for Thursday’s trading.  Micron’s Support (s1) will be $51.367 and Support (s2) will be $50.903.  Micron’s Resistance (r1) will be $52.227 and Resistance (r2) is $52.623.  At this time, after hours trading in E-Mini futures for the Dow, the S&P 500, the Nasdaq, and the Russell, are slightly negative.

(5) Thursday Recap:  Micron closed Thursday (8/30/2018) at $52.76, up +$0.93, or plus 1.79 percent.  Micron’s Close was a positive +$0.997 above the Pivot Point.  Micron’s Intraday Low ($51.40) was a positive +$0.033 above Support (s1) and a positive +$0.497 above Support (s2). Micron’s Intraday High ($53.68) was a positive +$1.453 above Resistance (r1) and a positive +$1.057 above Resistance (r2).  For Micron, this was a positive 5 by five day on a day that saw the DJIA, the S&P 500, and the Nasdaq close in the red.

 As to Micron for Friday (8/31/2018): Micron’s Pivot Point is $52.613.  Micron’s close at $52.76 is already above the Pivot Point … another positive for Friday’s trading.  Micron’s Support (s1) will be $51.547 and Support (s2) will be $50.333.  Micron’s Resistance (r1) will be $53.827 and Resistance (r2) is $54.893.

So far this week, the trading in Micron’s shares repeatedly tested, (and bested) the Contrarian (bullish) suggestions as noted above:

  • p-profit = “if Short look to take partial profits on any retracement to $51.77

Yesterday’s retest saw the Bulls push the Bears from the Intraday low of $51.40 to the Intraday High of  $53.68, as noted above and below:

  •  CCS = (if Short) suggested ” … capital conserving stops (CCS) in the region of $52.85
  • Sx = “If Short, exit all contracts at: $53.53”

The Shorts should be taking partial profits, and they should be reviewing sell side analyst report opinions and suggestions over this extended Labor Day holiday weekend in regards to the Samsung Galaxy 9 ads, as well as the Verizon and AT&T Galaxy 9 ads featuring the 1 Terabyte ready cell phone and how that undermines sell side analysts’ ‘cycles’ arguments  and DRAM/NAND surplus arguments, et cetera.

 

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—  Monday, 8/27/2018 thru Friday 8/31/2018  ——

 

  Hope the above MICRON TECH ORD (MU.O) calculations for Monday, 8/27/2018, day, week, and month (d-w-m) of August 2018,  helps your investing and trading planning today …

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