Micron has reached $97 on 17 Jul 2000, right before the dot-com crash. We are now back to exactly $97 (the blue line), for the second time, forming a gigantic cup (and handle) pattern. Look at the weekly chart to see it.
With such an epic pattern, the question is if we can position ourselves for a potentially large breakout.
Geometry:
Price has formed a bullish descending broadening wedge (green lines) and broke above it.
Oscillators:
RSI shows a bearish divergence, Stochastic is due to retrace.
Volume:
Vol is declining, suggesting that the uptrend is stalling.
Moving Averages:
The 20 week MA is approaching 80, the 50 EMA is at 85, potential supports.
How to trade it:
The fact that price approached the resistance for a second time seems promising for a large breakout. The problem is that we do not see a clear handle on the weekly chart. In the worst case, we will get a multi-year handle-forming chopfest.
Oscillators suggest that price needs further consolidation. The idea is to test longs at $94, and around $85, where the 38.2% retracement meets the incoming 20 week MA, and the trend line. Look for Stoch/RSI to be oversold. The expectations of a great earnings result (and the earnings itself) could be the catalyst for the breakout. The idea may not work if price falls below the green support line at $85.
With such an epic pattern, the question is if we can position ourselves for a potentially large breakout.
Geometry:
Price has formed a bullish descending broadening wedge (green lines) and broke above it.
Oscillators:
RSI shows a bearish divergence, Stochastic is due to retrace.
Volume:
Vol is declining, suggesting that the uptrend is stalling.
Moving Averages:
The 20 week MA is approaching 80, the 50 EMA is at 85, potential supports.
How to trade it:
The fact that price approached the resistance for a second time seems promising for a large breakout. The problem is that we do not see a clear handle on the weekly chart. In the worst case, we will get a multi-year handle-forming chopfest.
Oscillators suggest that price needs further consolidation. The idea is to test longs at $94, and around $85, where the 38.2% retracement meets the incoming 20 week MA, and the trend line. Look for Stoch/RSI to be oversold. The expectations of a great earnings result (and the earnings itself) could be the catalyst for the breakout. The idea may not work if price falls below the green support line at $85.