Another big tech name that's breaking out this week is Micron Technology (MU). Shares of the $15 billion flash storage firm spent the last month and change tracking sideways in a setup called a "rectangle pattern," but after the stock pushed through resistance at $14.50, traders are getting a buy signal in this stock as well.
Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Rectangles, double bottoms and other price pattern names are a good quick way to explain what's going on in this stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.That resistance line at $14.50, for example, is a price at which there was an excess of supply of shares; in other words, it's a place where sellers had been more eager to take recent gains and sell their shares than buyers were to buy. That's what made the move above it so significant -- the breakout indicated that buyers are finally strong enough to absorb all of the excess supply above that price level. If you jump in here, I'd recommend putting a protective stop just below the 50-day moving average.
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