How can investors be disappointed with a one-day 4% bump?
For starters, it’s off the session high of $78.69 - which is also a fresh 52-week high - when it was up almost 6.5% on the day. Additionally, investors may still be a bit salty about Monday’s action.
That’s when Micron stock rallied as much as 4.5% in early trading before ending lower by 1.5% at the close. That disappointing action wasn’t just reserved for Micron though, with Advanced Micro Devices (AMD) - Get Report, Nvidia (NVDA) - Get Report and other peers trading in a similar manner.
However, analysts came out in strong support of Micron on Tuesday, with multiple upgrades and price-target hikes.
The bulls are out ahead of the company’s earnings, scheduled for after the close of trading on Thursday.
Trading Micron Stock
Micron has actually been trading very well lately, despite the back-to-back fades we’ve seen this week.
In early November, the stock broke out over $55. Then it quickly cleared the pre-coronavirus 2020 high at $61.19 and the 2018 high at $64.66.
More recently, shares were trading between $69.50 and $74.50. While Micron has struggled to hold above the upper end of that range, it is doing that now ahead of earnings.
If we see more pre-earnings momentum, let’s see if it can clear the current two-day high at $78.69. Above that will put the 161.8% extension in play at $79.77.
It wouldn’t likely be in a straight line, but above $80 and the two-times range extension at $91.25 could be on the table. Keep in mind, Micron’s all-time high — from 2000 — is up at $97.50.
If the post-earnings reaction is bearish, it might be too tight of a range to expect Micron to hold $74.50 as support. If it does though, I would view it as a bullish dip.
Below $74.50 will put the $71.50 to $73 area in play, where Micron finds the 10-day and 21-day moving averages and VWAP support.
If that area fails as support, it will put range support back in play near $69.50, as well as the 10-week moving average.