NEW YORK ( TheStreet) -- This week we're seeing earnings from some technology stocks -- Adobe (ADBE) and Jabil (JBL) reported Tuesday; Micron (MU) and Oracle (ORCL) report Thursday. With the official earnings season just a couple weeks away, these early/late reports can offer some insight into what to expect. Adobe looks fine with guidance at the high end of the range. The stock popped after-hours Tuesday but had sold off for a month into the report. Jabil looks like a carbon copy on the Adobe's behavior after reporting Tuesday as well.
I wrote about Oracle on RealMoney earlier this week and it's a name I like and own. I do not expect Oracle to disappoint and its stock has been working higher in anticipation despite the market drubbing administered over the past month.
Micron (MU), meanwhile, is an interesting case and, like the others, has sold straight down for the past six weeks. Here is the daily chart.
The stock has just completed an AB=CD pattern to the downside and appears ready to bounce. If I pull the chart back a bit to a weekly view, what you see is that not only has the AB=CD pattern completed but it has completed as part of hitting a decent support zone. The final support zone is located just beneath and is the last support zone visible on this time frame.
Although as a matter of principal I almost never trade in front of earnings, this looks like a pretty good setup to trade to the long side. Risk is minimal and the resistance looks to be all the way back up around $9.50 to $10. It's the monthly chart that tells us this is only a trade though. Look at how volume is expanding as price goes lower. Although Micron likely holds and gives a good bounce, I do expect it to revisit these lows again and probably sooner rather than later.
The good news is that there was volume in early 2011 when the highs of 2010 were tested. The bad news is that despite that price couldn't hold and now volume is expanding as prices decline. Furthermore, there's not much volume on that swing point low (the low in 2010) and if it is broken, then I wouldn't want to touch this stock. Until next time, just keep trading the charts!
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV