MICRON Technology Inc. (MU.O) (d-w-m) for Monday (20180924)

 

  Updated 9/28/2018: For Thursday’s trading numbers see the Daily Pivot Point, Support, and Resistance Section (PPt-Sup-Res) below.  The (PPt-Sup-Res) numbers will be updated every day in this blog section as we head into the last trading day of September: Friday 9/28/2018.

Notes:   Confirmed:  The US Federal Reserve (the FED) raised its target overnight rate to a range of 2 percent to 2.25 percent, up from 1.75 percent to 2 percent. The GICS = MSCI reclassification of Tech stocks occurs after the market close Friday.

Homework in progress and more to add.

 

Date  Open  High  Low  Close* Vol/100
9/17/2018 43.59 44.32 43.25 43.58 282053
9/18/2018 43.93 45.87 43.88 45.33 365074
9/19/2018 45.78 46.06 44.84 45.06 292647
9/20/2018 46.4 47.2199 45.91 46.06 751441
9/21/2018 *QW 44.4 45.60 43.80 44.74 970534

 

    Quadruple Witching Friday, the day after Micron’s Q4’2018 earnings report and financial call, Micron Tech (MU) closed at $44.74 down -$1.32 cents or -2.87 percent. Year to date, Micron is up 8.80 percent.  Friday Recap: Canada NAFTA trade re-negotiations ended another week without an agreement.  Micron’s Close was -$1.657 below its Pivot Point for Friday (negative). Micron’s Intraday Low was -$1.773 below its Support (s1) (negative) and was -$1.287 below its Support (s2) (negative). Micron was -$1.283 below Resistance (r1) (negative) and was -$2.107 below Resistance (r2) (negative).

Micron’s (PPt-Sup-Res) numbers for Monday’s trading: Micron’s Pivot Point is $44.713. Micron’s Support (s1) is $43.827. Micron’s Support (s2) is $42.913. Micron’s Resistance (r1) is $45.627 and Resistance (r2) is $46.513Micron’s close at $44.74 is +$0.027 above its Pivot Point for Monday (positive).

News:

Friday morning,  ‘iFixit’ reported a teardown of Apple’s new iPhones included Micron memory chips, with nothing noted from Samsung or SK Hynix.

Micron Short Interest:  or see link below

https://vet67to82.wordpress.com/2018/09/26/micron-short-interest/

Micron’s Q4’2018 and Yearend Earnings Report and Financial Call

I listened to Micron’s great Financial call.  Micron reported approximately $2.7 billion net cash positive position.  Micron also reported finishing Q4 with about $4.6 billion in debt.  These numbers should garner Credit Ratings upgrades. Credit upgrades should force sell-side analysts to, begrudgingly, revise their assessments ‘up’.   I heard Micron management state it achieved two thirds trade NAND packaging in Q4’2018 … on Micron’s path to 80 plus percent trade NAND packaging by 2021. I had only modeled a FY2018 increase to 45 to 50 percent, as noted in my previous blogs, and comments elsewhere.  Micron’s ‘packaging’ of multiple chips is amazing for mitigating declining ASPs and sustaining margins.  The surprise achievement of two thirds trade NAND ‘packaging’ also puts Micron way ahead of the sell-side analysts’ cycles of the past arguments.  Simply, as Micron packages more of its trade NAND, the NAND spot market prices mean less and less, and it also means Micron is further along in its change from a ‘chips as commodities’ manufacturer to becoming a packaged products manufacturer.
In my previous blog, I posted my conservative estimates as: “09/20/18 Q4 2018 Micron Tech Earnings Press ReleaseEstimate: $3.33: GAAP (ttm): $11.29 non-GAAP (ttm): $11.75”   Micron reported Fiscal Year (FY) 2018 non-GAAP diluted EPS of $11.95.  A twenty cent beat on MY non-GAAP #s.  See select Q4 and FY 2018 numbers below:

  • ▪ Revenue − $8.44 billion in FQ4-18 − $30.39 billion in FY-18
    ▪ GAAP gross margin − 61% in FQ4-18 − 59% in FY-18
  • FY 2018 GAAP net income of $14.14 billion, or $11.51 per diluted share
  • FY 2018 Non-GAAP net income of $14.70 billion, or $11.95 per diluted share
  • ▪ Non-GAAP gross margin − 61% in FQ4-18 − 59% in FY-18
    ▪ Non-GAAP operating expenses of $740 million in FQ4-18
    ▪ Non-GAAP operating income of $4.44 billion in FQ4-18
  • FY 2018 Operating cash flow of $17.40 billion, compared with $8.15 billion for the prior fiscal year

As reported on a Q4 basis, DRAM ASPs were flat from the previous quarter and NAND ASPs decreased in the mid-teens percentage from the previous quarter.

Looking forward to Q1’2019 and FY2019, Micron plans to grow DRAM bits inline with industry estimated growth of 20 percent.  Micron’s CEO expects DRAM profitability to remain strong as the market continues to benefit from long term growth drivers.  Amazon recently presented new products with web connectivity like a microwave and more … more need for DRAM and NAND.  Micron forward guidance, despite headwinds, suggests Q1’2019 Revenues of $7.9 to $8.3 billion dollars with expected EPS of $2.95 +/- 0.07.

However, the market’s response over Micron’s great report were tempered by ‘forward guidance’ information on US income tax increases, impact of tariffs, a CPU shortage (Intel?), a handful of un-named companies that are adjusting their memories inventories,  and Micron is deciding to no longer report separate DRAM and NAND gross margins, but will still report combined/overall numbers …  Micron said it is working on a plan to mitigate the impact of tariffs which are expected to impact gross margins by 50 to 100 basis points. … and it’ll take a couple of quarters for Micron to achieve mitigation success … unless China and the USA arrive at a fair and equal treatment trade agreement sooner.   As to the high value CPU shortage, Intel has been struggling in its CPU node transition from 14nm to 10nm … how long those struggles will continue will have to be answered by Intel (INTC).

What is incredulous, is the market’s response to Micron’s great report.  Micron will only (disappointedly?) be growing Revenues vs FY2018 by 16 to 22 percent.  Micron will be using approximately 50 percent of free cash flow to buy back up to $10 billion of its issued and outstanding shares.  Micron also stated it will be using an unspecified amount of Cash (IMHO, to take advantage of Mr. & Ms. Fickle Markets implied mispricing of Micron’s shares) to buy back shares.  The disappointment with Micron’s forward guidance is due to conditions beyond Micron’s control … like taxes, tariffs, and CPUs … Still, and it bears repeating, Micron suggests Q1 Revenue of $7.9 to $8.3 billion dollars with expected EPS of $2.95 +/- 0.07 … so, where’s the beef?

Hopefully, Mr. & Ms. Fickle Markets analysts are doing their homework, homework they are PAID to do, this weekend … and since we are all working from the same numbers, arrive at the same, or at least a similar conclusion … that Micron, as reported by ‘iFixit’. is taking market share from the competition, increasing packaging, and the current pps is going to look like a bargain.

 

  Quarterly GAAP, non-GAAP, and GAAP (ttm) diluted Earnings per share

  • 09/20/18  Q4 2018 Micron Tech Earnings Press Release-
    • GAAP $3.56 non-GAAP: $3. 53 
    • GAAP (ttm): $11.51  non-GAAP (ttm): $11.95
  • 06/20/18  Q3 2018 Micron Tech Earnings Press Release–
    • GAAP $3.10 non-GAAP: $3.15 
    • GAAP (ttm): $9.95  non-GAAP (ttm): $10.44
  • 03/22/18  Q2 2018 Micron Tech Earnings Press Release-
    • GAAP $2.67 non-GAAP: $2.82  
    • GAAP (ttm): $8.25
  • 12/19/17  Q1 2018 Micron Tech Earnings Press Release-
    • GAAP $2.19 non-GAAP: $2.45
  • 09/26/17  Q4 2017 Micron Tech Earnings Press Release-
    • GAAP $1.99 non-GAAP: $2.02
  • 06/29/17  Q3 2017 Micron Tech Earnings Press Release-
    • GAAP $1.40 non-GAAP: $1.62
  • (ttm) = trailing twelve months

 

Geo-political RISKS, The USA – China Trade Dispute

  The debate is on as to the characterization of the USA versus China trade tariffs constitutes a ‘trade war’ or an ‘economic war’.  The many issues boil down to (a) the trade imbalance, (b) China’s taking of US company intellectual property thru hacking and forced partnerships with China state owned companies that require technology transfers, (c) China’s threats against any thought of Taiwan as an independent separate country, and … (z) the South China Sea island building (seven islands so far) and militarization that is pointing to the threat of a shooting WAR between China and the USA.  China’s claims in the South China Sea, through which approximately $3 trillion USD of shipborne trade passes each year, are contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

  The tariffs tiff is best characterized as an ‘economic war’ with China taking advantage of previous USA Administrations and Congressional representation as the primary instigators of the current trade dispute by allowing US companies to take jobs and intellectual properties overseas.  The USA government’s repeated blunders that put Americans out of a job, reducing federal and state tax income,  lead to the budget and trade deficits we have now.  Despite the evidence, the USA, thanks to an inept, party line driven, US Congressional House and Senate, still does not have sanctions backed Laws to deal with hacking, US intellectual property theft, US elections meddling, et cetera. 

  

 S&P Dow Jones Indices and MSCI GICS Structural Changes in 2018

   In November 2017, , the S&P 500 and MSCI announced changes to their Global Industry Classification Standard (GICS®) and renaming the Telecommunication Services Sector as Communication Services.  The full list  of affected securities was to be provided on July 2, 2018 with updates on August 1st, 2018, and September 3rd, 2018.  

 

  Two of Micron’s web addresses worth checking out and adding to your favorites.

     https://www.micron.com/about/insight

   https://www.micron.com/about/blogs/2018/september/micron-is-virtually-unbeatable-at-vmworld-2018

 

  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 MICRON TECH ORD (MU.O) charts

 (Note: I still have additional info to add) :

 

      ——————————————————–

 mu 20180921d

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: $40.68
  • ·         ST rally back = ” … short term price advance back to the $46.16 area.
  • ·         p-profit = “if Short look to take partial profits on any retracement to $47.22”
  • ·         CCS = (if Short) suggested ” … capital conserving stops (CCS) in the region of $48.45 
  • ·         Sx = “If Short, exit all contracts at: $53.23

 

 Note 

 

 

 mu 20180921d1

Chart 2: Micron Tech, Daily, EOD, O-H-L-C w/Resistances (r2, r1), Pivot Point (PP), and Supports (s1, s2).  Observations: when spreads widen between support and resistance, Micron’s pps tends to decline.  When spreads narrow, the suggestion is Micron’s pps rallies.  The CLAW formation w/Supports (s1,s2) pointing up to the Pivot Point and Resistances (r1,r2) pointing down to the Pivot Point suggest a ‘move’ is at hand, and more homework is required to determine if that move is up, or down.   

 Analysis of DAILY chart activity through Friday’s (9/21/2018)  close at $ 44.74

    The current 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 $47.22.  Traders with remaining short positions, after profit taking, should consider placing capital conserving stops (CCS) in the region of $48.45.  Be prepared for a potential short-term price advance back to the $46.16  area.

   Suggested placement of capital conserving stops (CCS):

  •    If Long, exit all contracts at:     $40.68
  •   If Short, exit all contracts at:     $53.23

 

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 1 trading day ago.  Since the MACD crossed above its moving average, MICRON TECH ORD’s price has decreased -2.87%, and has ranged from a low of $43.80 high to a high of $47.22. The MACD is not in an Overbought/Oversold range.  There have been no divergence signals within the last 5 trading days.

MACD Value:  -1.698        Signal Line:  -1.769

 

(1.b) Friday’s (9/7/2018)  Relative Strength Index (RSI) for MU was 40.6512 up from Friday’s (9/14/2018) 35.7338.    The RSI calculations are based on the Close over a 14-trading day period.

Notes:  The Stochastic Oscillator (Stoch) generated a Buy signal on Thursday (9/13/2018).  The Moving Average Convergence Divergence (MACD) generated a Buy signal on Thursday (9/20/2018).

(1.c) Micron’s On Balance Volume (OBV) is a positive 15359353.0, up from last week’s,  but while declining, Micron’s OBV is still 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 towards 49.38.
  • The upper projected Target is: $48.19.
  • The lower projected Target is: $40.86.
  •  The projected closing price is: $44.53. 
  • Note: the above DAILY chart price projection ranges are for reference only and can be easily exceeded by Mr. & Ms. Fickle Markets.

 

mu 20180921sma

(1.f) DAILY chart Moving Averages

  • The 3 period Simple Moving Average (sma3) at 45.29 is in a downtrend.
  • The 9 period Simple Moving Average (sma9) at 44.23 is in a downtrend.
  • The 20 period Simple Moving Average (sma20) at 47.31 is in a downtrend.
  • The 50 period Simple Moving Average (sma50) at 50.43 is in a downtrend.
  • The 100 period Simple Moving Average (sma100) at 53.13 is in a downtrend.
  • The 200 period Simple Moving Average (sma200) at 50.32 is in an uptrend.
  • The 400 period Simple Moving Average (sma400) at 41.52 is in an uptrend.

  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.

  • See Friday’s Recap and Monday’s numbers in the above remarks.

2) Monday, Micron Tech (MU) closed at $45.16 up 42 cents or +0.94 percent. Year to date, Micron is up 9.82 percent.  Monday Recap:  Micron’s Close was +$0.447 above its Pivot Point for Monday (positive). Micron’s Intraday Low was +$0.033 above its Support (s1) (positive) and was +$0.947 above its Support (s2) (positive). Micron was +$0.023 above Resistance (r1) (positive) but was -$0.863 below Resistance (r2) (negative).

Micron’s (PPt-Sup-Res) numbers for Tuesday’s trading: Micron’s Pivot Point is $44.89. Micron’s Support (s1) is $44.13. Micron’s Support (s2) is $43.10. Micron’s Resistance (r1) is $45.92 and Resistance (r2) is $46.38Micron’s close at $45.16 is +$0.27 above its Pivot Point for Tuesday (positive).

3) Tuesday, Micron Tech (MU) closed at $44.64 down -$0.52 cents or -1.15 percent. Year to date, Micron is up 8.56 percent. Tuesday Recap: Micron’s Close was -$0.25 below its Pivot Point for Tuesday (negative). Micron’s Intraday Low was -$0.11 below its Support (s1) (negative) but was +$0.92 above its Support (s2) (positive). Micron was -$0.459 below Resistance (r1) (negative) and was -$1.219 below Resistance (r2) (negative).
Micron’s (PPt-Sup-Res) numbers for Wednesday’s trading: Micron’s Pivot Point is $44.707. Micron’s Support (s1) is $43.953. Micron’s Support (s2) is $43.266. Micron’s Resistance (r1) is $45.394 and Resistance (r2) is $46.147. Micron’s close at $44.64 is -$0.067 below its Pivot Point for Monday (negative).

 4) Wednesday, Micron Tech (MU) closed at $44.35 down -$0.29 or -0.65 percent. Year to date, Micron is still up 7.86 percent, but down -$20.31 or down -31.41 percent from its 52-week high.   Wednesday (9/26/2018) Recap:  Micron’s Close was -$0.357 below its Pivot Point for Wednesday (negative). Micron’s Intraday Low was +$0.007 above its Support (s1) (positive) and was +$0.694 above its Support (s2) (positive). Micron was -$0.634 below Resistance (r1) (negative) and was -$1.387 below Resistance (r2) (negative).

Micron’s (PPt-Sup-Res) numbers for Thursday’s trading: Micron’s Pivot Point is $44.357. Micron’s Support (s1) is $43.953. Micron’s Support (s2) is $43.557. Micron’s Resistance (r1) is $44.753 and Resistance (r2) is $45.157Micron’s close at $44.35 is  -$0.007 below its Pivot Point for Thursday (neutral).

5) Thursday, Micron Tech (MU) closed at $44.99 up +$0.640 or +1.44 percent. Year to date, Micron is still up 9.41 percent, but down -$19.67 or down -30.421 percent from its 52-week high.
Thursday (9/27/2018) Recap: Micron’s Close was +$0.633 above its Pivot Point for Thursday (positive). Micron’s Intraday Low was +$0.093 above its Support (s1) (positive) and was +$0.489 above its Support (s2) (positive). Micron was +$0.767 above Resistance (r1) (positive) and was +$0.363 above Resistance (r2) (positive).
Micron’s (PPt-Sup-Res) numbers for Friday’s trading: Micron’s Pivot Point is $44.852. Micron’s Support (s1) is $44.184. Micron’s Support (s2) is $43.378. Micron’s Resistance (r1) is $45.658 and Resistance (r2) is $46.326. Micron’s close at $44.99 is +$0.138 above its Pivot Point for Friday (positive).

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

—  Monday, 9/24/2018 thru Friday 9/28/2018  ——

 

  Hope the above MICRON TECH ORD (MU.O) calculations for Monday, 9/24/2018, day, week, and month (d-w-m) of September 2018,  helps your investing and trading planning today …

 

 

 

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