3 patterns + possible implication for $MU
Updated
(1) A falling wedge has formed since October, wich is a longer-term pattern,
and since
MU is in a down trend since 2014, this should be considered bullish.
(2) A head and shoulders pattern has completed, with target 10.
[Fundamentals ofMU are very bearish, in the short term at least:
Micron Technology's FQ2 2016 Guidance (Non GAAP) is a loss of -0.12 to -0.05 per share. The first loss in years and much worse than expected. Gartner forecasts an oversupply in DRAM in 2016, Micron lags behind Samsung, etc. In the long run there are fundametals to be bullish about, eg 3D Xpoint.]
Combining these two patterns gives a price target and a time-frame.
Additional points:
* Historically 10 acted as support and resistance.
* It still has to break through the 13.50 support at which it triple-bottomed.
Which historically never played a role, but was the low during the "flash crash" of August 24.
Putting things together gives a possible scenario/speculation/what to look for:
MU pushes through the support at 13.50 during the first half or so of January.
After this MU keeps trading between the trendlines of the falling wedge, until it reaches the 10 area. This should be somewhere around end February, first half of March.
Here it might break above the upper resistance, completing the (bullish) falling wedge pattern. Who knows that involves a rally before FQ2 earnings.
and since
MU is in a down trend since 2014, this should be considered bullish. (2) A head and shoulders pattern has completed, with target 10.
[Fundamentals of
MU are very bearish, in the short term at least:Micron Technology's FQ2 2016 Guidance (Non GAAP) is a loss of -0.12 to -0.05 per share. The first loss in years and much worse than expected. Gartner forecasts an oversupply in DRAM in 2016, Micron lags behind Samsung, etc. In the long run there are fundametals to be bullish about, eg 3D Xpoint.]
Combining these two patterns gives a price target and a time-frame.
Additional points:
* Historically 10 acted as support and resistance.
* It still has to break through the 13.50 support at which it triple-bottomed.
Which historically never played a role, but was the low during the "flash crash" of August 24.
Putting things together gives a possible scenario/speculation/what to look for:
MU pushes through the support at 13.50 during the first half or so of January.
After this MU keeps trading between the trendlines of the falling wedge, until it reaches the 10 area. This should be somewhere around end February, first half of March.
Here it might break above the upper resistance, completing the (bullish) falling wedge pattern. Who knows that involves a rally before FQ2 earnings.
Note
January 8th: MU broke through the support area around 13.50.Some fundamentals to take note of are
Price/Sales (ttm): 0.94
Price/Book (mrq): 1.15
Enterprise Value/Revenue (ttm): 1.19
Enterprise Value/EBITDA (ttm): 3.71
These are tremendously low. They indicate that
MU at these prices is a good value proposition.Also the very low EV/EBITDA makes Micron Technology an attractive takeover candidate. This fact constitutes a risk when shorting MU!
Do your own due diligence when using it.
Personally I am not shorting MU.
Note
PSI posted the above comment because the analysis didn't take into account any metrics.
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