Micron Technology (MU) traded 7% higher on Tuesday morning, after the chipmaker announced a program to buy back up to $10 billion of its stock. This would equate to 16% of the company’s outstanding shares.

“Micron is executing well on its production roadmaps and steadily closing the cost/competitive gap,” noted JP Morgan, “with its main competitors in a constructive supply/demand environment that is leading to strong free cash flow generation, resulting in the team instituting a strong capital return program.”

In analyzing the market cycles for MU on the chart below, we can see that the stock is now in the rising phase of its current minor cycle. While we are generally skeptical of the value add of stock buybacks, our work shows improved technical patterns and stronger momentum. Our current projection is for a likely test of the high over $63. For an introduction to cycle analysis, check out our Stock Market Cycles video.

Micron Technology (MU) Stock Chart with Weekly Bars

Powered by WPeMatico