NEW YORK (TheStreet) -- Chip maker Micron Technology (MU) - Get Report is one of 30 components of PHLX Semiconductor Index, also known as the SOX. Micron has gone from a leadership role in 2014 to a major drag in 2015.
In 2014, Micron had an annual gain of 61%, helping the SOX gain 28.4%. So far in 2015, Micron is down 31.3% year to date, with the SOX hanging onto a gain of just 4.3%.
With this reversal of fortune, it will be difficult for Micron to significantly turn things around when the company reports quarterly results after the closing bell on Thursday.
Analysts expect Micron to earn 58 cents a share, revised down from 63 cents a share a week ago. Some say the company will earn 57 cents a share, so the earnings bar has been lowered as the technicals have been weakening.
Jim Cramer cautions investors to be careful about investing in this stock. Also adversely affecting the stock is a lowered share price target to $40 from $50 at Needham.
Here's the daily chart for Micron.
Micron had a close of $24.06 on Wednesday, down 31.3% year to date and 34.2% below its multiyear intraday high of $36.59, set on Dec. 8. The index is below the "death cross" of its 50-day and 200-day simple moving averages of $27.03 and $30.27, respectively.
Here's the weekly chart for Micron.
Courtesy of MetaStock Xenith
The weekly chart for Micron is negative, with the stock below its key weekly moving average of $26.09, with its 200-week simple moving average at $17.01. The projected reading is 25.15, down from a reading of 29.73 on June 19.
Investors looking to buy Micron should place a good till canceled limit order to buy the stock if it drops to $15.57, which is a key level on technical charts until the end of 2015.
Investors looking to reduce holdings should place a good until canceled limit order to sell stock if it rises to $26.87, which is a key level on technical charts until the end of June.
Investors not familiar with technical analysis should begin with the notion that a price chart for a stock shows a road map of past price performance, which provides guidance for predicting future share price direction.
Here's how to read a daily chart. There are two moving averages to follow; the 50-day simple moving average is in blue while the 200-day simple moving average is in green.
Here's how to read a weekly chart. This chart shows weekly price bars going back to the beginning of 2007 and thus includes the Crash of 2008, then the current bull market for stocks that began in March 2009. The red line tracks the ups and downs of the key weekly moving average. The green line is the 200-week simple moving average. The red line that oscillates along the bottom of the chart is the momentum reading on a scale of 00.00 to 100.00. A reading below 20.00 is oversold and a reading above 80.00 is overbought.
A technically positive weekly chart occurs when a stock ends a week above its key weekly moving average with the momentum reading rising above 20.00.
A technically negative weekly chart occurs when a stock ends a week below its key weekly moving average with the momentum reading declining below 80.00.
This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.