We're seeing another bottoming pattern forming in shares of Micron Technology (MU - Get Report). Like Microsoft, Micron has underperformed the broad market this year, barely breaking even between the first trading day of January and today. But a long-term double bottom formation in shares is a sign that shareholders could be getting a reprieve from selling very soon.
A double bottom is a price pattern that's formed by two swing lows that bottom out at approximately the same price level. The two bottoms are separated by a peak that marks that resistance level for the setup -- a breakout above that price (right around $7 for MU) is the buy signal for shares. It's worth noting that resistance in Micron is actually tougher than just a single peak: that $7 barrier has been acting like strong resistance on the last five attempts higher. Believe it or not, that's actually a good thing because it means that a breakout above resistance carries more technical significance for MU.
Remember that this is a long-term pattern -- it's been forming since all the way back in April, so its trading implications are bigger too. The breakout above $7 is likely to come with a long-term shift towards buyers being in control of this stock...
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
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
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts