This Stock is in a Strong Bull Channel

Micron Technology, Inc. (NASDAQ:MU) — On Sept. 16, I reviewed MU and recommended that traders buy it “close to its 20-day moving average at $16.64 (green line) for a target of $20 and a proposed return of about 20%.

However, those who bought the stock on July 27 (a prior recommendation) and have not taken profits should hold for a target of about $20, expanding their return to over 33%.”

On Feb. 2, the stock made a high at $25.31, pulled back to its 50-day moving average at about $23, and yesterday picked up buyers in the face of a declining market.

The shares rose to a high of $25.25 in what appears to be a strong attack on its high, motivated by a new target of $42 by the Needham analyst.

Micron manufactures semiconductor memory DRAM and NAND flash memory and image sensors.

Its products are used in mobile products. It is a relatively large semiconductor company and the sole American survivor in the global DRAM industry.

Early in February, MU hosted its Winter Analyst Day, and as a result Credit Suisse reiterated its “outperform” recommendation with a target price of $30.

The analysts from CS focused on three reasons for their positive outlook: 1) MU’s 3D NAND is better than expected, 2) Operational efficiencies may be optimized and have room to do so, 3) The CEO announced his intent to retire, and MU is making progress in finding a replacement. Finally CS estimates fiscal year (August) 2017 at $2.64 up from FY 2016’s 25 cents. They forecast $3.45 for FY 2018.

Technically, MU has advanced from May of last year within a near-perfect bull channel supported by its 50-day moving average, now at $23.08. Yesterday the stock attracted higher volume (upside) than usual, and the MACD internal indicator flashed a new buy signal.

Thus, if you own it, hold this stock for a target of $30. New buyers should try to enter the channel at about the mid-point at $23.90 or at the current market price.

– Sam Collins, Trade of the Day

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Source: Investor Place



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