Watching Mu – 1st/2nd Quarter 2022

4th Quarter Stock with 1st/2nd Quarter 2022 Potential

As an enduser of Micron memory products I take a great interest in the company. Micron (Mu) has weathered the second year of the pandemic, fears of inflation, and Fed policy changes. In the second and third quarters of 2021 Micron retracted in price from the year’s high of $96.98 to a low of $65.65, while the technology sector XLK only retracted during the 3rd quarter of the year. This divergence in Micron’s price from that of the sector can be seen below. The NASDAQ has a year price target of $100.50. All these first observations were capture the last two weeks of December 2021.

XLK – the technology sector.
Micron (Mu) daily chart.

The week opened with Micron surging 11% with Monday Dec. 21st earnings report. Micron saw some price consolidation on Wednesday 22 December daily chart as indicated by the inside bar below. The upward price break of $90.48 for the inside bar (labelled 1) is seen as a continued bullish pattern for Thursday December 23rds continuation bar (labelled 2). Bullish market sentiment has been expressed by Seeking Alpha and Investor’s Business Daily. The next price target would be the yearly high of $96.96 and then the forecast of $100.50.

As of the last week in December, Micron (Mu) will be observed for the next price break of the current continuation bar high of $95. Overall market conditions will greatly impact price movement above all time highs. The semi-conductor sector having been impacted by the pandemic and resulting supply chain issues is projected by some to continue to be a favored industry to be invested in as demand continues into 2022 as reported by MarketWatch.

Update Febuary 20, 2022

The 60 day follow-up on Mu shows a stock continuing to be impacted by the broader market and economic/world catalytic events. Our top chart below is the XLK and the bottom Mu. With each, sideways movement was observed into the start of 2022, and likewise each declined with the unfolding of inflationary concerns and the corresponding Federal Reserve meetings and minute releases.

XLK the technology sector ETF
Mu – Micron Technologies

In spite of the inflationary concerns, and unlike the borader XLK or SPY, Micron has been able to recover to it’s pre-Christmas price levels. The pent-up worldwide demand for chips remain even with the pullback in manufacturing that requires these memory products. At the close of 2021 Forbes reflected on a Coughlin Associates and Objective Analysis depicting projections for various memories, suggesting increasing demand through 2031. Likewise during the month of January 2022 other outlets suggest an optimistic outlook (Seeking Alpha, CNN Money, Fool.com, etc).

The remainder of the first quarter may continue to be muddied with the current geopolitical events unfolding in eastern Europe between the Ukraine and Russia. Inflationary concerns and the Federal Reserves response will also continue to be a major factor in short term to intermediate returns. All interested eyes will be focused on the anticipated late March 2022 earnings report. TipRanks.com has a consensus EPS forecast of $1.97 which is double last year’s EPS OF $0.98 – with an analyst consensus of “strong buy”. A break of the previous week’s (week ending 18 February 2022) high of $96.50 will place Mu back in the favorable sights of traders for a push towards it’s $98.45 high. Otherwise the less favorable break below $88.80 below the 20 day EMA will be a bearish break lower with targets of $83.63 and approximately $80. The month of March will be telling. An additional follow-up forth coming.

Disclaimer

This analysis is for entertainment purposes, what to do with this information is found in the disclaimer below. This trade is suggested as a simulation – paper trade only. When you want to learn to trade, check out TastyTrade – they have a FREE trading program, and when you’re ready to open a trading account TastyTrade has an awesome platform (TastyWorks).

NEVER enter a trade without a plan for BOTH entry and exit. 95% of traders fail because for a combination of reasons including not having a well-thought-out plan of action and rules for trading. Random good fortune is the only reason you hear of novice traders being successful today, tomorrow holds a high probability they will lose it all, and if leverage is involved the loss can even be greater.

No Investment Advice Provided

As with all financial decisions – all monies are at risk of loss. So simply DO NOT DO THIS TRADE or assume this is investment advice – IT IS NOT INVESTMENT ADVISE. This information is for entertainment purposes only, so don’t make yourself the one everyone else is laughing at.

Any opinions, chats, messages, news, research, analyses, prices, or other information contained on this Website are provided as general market information for educational and entertainment purposes only and do not constitute investment advice. The Website should not be relied upon as a substitute for an extensive independent market research before making your actual trading decisions. Opinions, market data, recommendations or any other content is subject to change at any time without notice. RalphPatterson.com, will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

We do not recommend the use of technical analysis as a sole means of trading decisions. We do not recommend making hurried trading decisions. You should always understand that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Paying things forward

If you like this article and want to pay it forward consider joining Robinhood

You are the new Wall Street. Earn 5 stocks on us.For every friend you successfully refer, you’ll now earn five gift stocks! Offer ends on August 16, 2021.

Image attribution: Robinhood

Five total gift stocksYou used to get just one gift stock for every friend you refer. Now, you’ll receive 5 total gift stocks for every referral once your friend successfully signs up and links their bank account. Your friend will also get one gift stock, too! Certain limitations apply. Read terms and conditions.Pay it forwardHelp your friends start their Robinhood journey with a referral. Just make sure their account gets approved and they link their bank account in order to be eligible!Unlimited invitesYou can invite as many friends as you want, and can receive up to $500 in gift stocks each year.

Robinhood

Join Robinhood with my link and we’ll both get free stock  https://join.robinhood.com/ralphp79

Pay it forward AND learn to trade

Step up to a professional trading platform. An excellent platform to learn about trading AND to trade on is TastyTrade/TastyWorks. Their focus is on options trading, they have plenty of tutorials and an awesome LIVE program every day of the week and are available for replay. Traveling, no problem – with their mobile app you can watch/listen to their live program as well as trade straight from your phone or mobile device. TastyTrade offers one of the best execution times of any broker and an actual LIVE help desk you can phone for advice in using their platform.

What do I get for your referral? … a hotdog.

Leave a Reply

Your email address will not be published.