Micron (MU) - Get Report finished last week with an impressive 7.4% gain on its heaviest volume since July of 2015. This powerful earnings-inspired breakout began with a huge upside gap that drove shares to new rally highs. Despite this very bullish early action, Micron closed well its highs of the day sending a sign of potential exhaustion. A pullback may be ahead before the post election rally can continue.
Since the November low, Micron has been tracing out a very orderly rally. When needed the stock has pulled back numerous times before the action reached overbought territory. After Micron's previous earnings report, back on Dec. 22, the stock consolidated after the 12.65% gain for three weeks. At Friday's peak Micron had stretched its gain since the December 22 report to 40%. Another post earnings pullback similar the last one now looks very likely.
Patient Micron investors should keep a close eye on the $26.60 to $25.30 area if Friday's early high does prove to be and exhaustion gap. This key support zone includes the initial March high, Friday's opening gap and the February peak. A light volume drift back down to this area will provide a very low risk entry opportunity for patient bulls.