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This morning, Goldman Sachs downgraded Micron (MU) from Buy to Neutral and cut their price target from $60 to $49. The analyst believed that the company’s current valuation fully reflects Micron’s growth prospects. Micron was down about 1% on the trading day. Given this background, let’s take a look at the charts.
Micron Technology (MU) Weekly Chart – annotations by askSlim.com
At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.
askSlim.com Technical Briefing: The weekly cycle analysis suggests that MU has a negative weekly cycle pattern and is forming a bear flag. Weekly momentum is negative. The next projected intermediate-term low is due between early-to-mid June.
On the upside, there is an intermediate-term resistance zone from 46.16 – 49.71. On the downside, there is a Fibonacci extension zone from 34.78 – 31.23. Our analysis suggests that for the bulls to regain control of the intermediate-term, we would need to see a close above 54.76.
askSlim.com Sum of the Evidence: MU is in a negative weekly cycle pattern with negative momentum. Given these conditions, we would expect any upside to be limited to the intermediate-term resistance zone beginning at 46.16. We would expect this rally to fail at resistance and get more selling pressure down to the Fibonacci extension zone beginning at 34.78 by June.
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