We are opening a new bullish trade on Micron (NASDAQ:MU). As we progress through earnings season, one of the trends that has been true during the past few quarters that is proving to continue to hold true this quarter is that the demand for technology stocks is strong.
Additionally, the sectors that are doing well tend to continue doing well unless something happens to force them to change.
MU dropped in late June — ultimately bouncing up off support at $50 — in the aftermath of not only escalating trade-war tensions as traders worried China may impose restrictions on tech companies operating in China but also as a Chinese court sided with UMC (UMC), and issued a preliminary injunction, in a lawsuit brought by the company claiming that MU had infringed on its patents.
Fortunately for MU, analysts have realized the minuscule magnitude of the lawsuit to MU’s overall business activities in China, and they have reaffirmed their bullish outlook for the stock.
Now that the stock has successfully filled the bearish gap it formed on June 25, we are looking for MU to climb back up into the trading range between support at ~$58 and resistance at ~$64 that the stock was trading in during both late March and late May as well as early June.
‘Buy to open’ the MU August 17th $60 Call (MU180817C00060000) for a maximum price of $1.90.
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Source: Investor Place