On 2/12/20, UBS analyst, Timothy Arcuri upgraded MU from neutral to buy and raised his price target from $47 to $75. The analyst cited a DRAM upswing, which should last deep into 2021. Micron derives approximately 60% of its revenue from DRAM. UBS believes that Micron deserves to trade at a higher multiple given the company’s competitive positioning and through-cycle financial performance. Let’s see what the charts tell us.
Micron (MU) Weekly Chart Grid – 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 Micron is in a very positive intermediate-term pattern. Weekly momentum is positive.
On the upside, there is an intermediate-term Fibonacci projection/target zone from 65.28 – 68.71. On the downside, there is a rising intermediate-term Fibonacci support at 56.46 followed by another zone of support from 53.65 – 49.10. For the bears to regain control of the intermediate-term, we would likely need to see a weekly close below cycle low support at 44.55.
askSlim.com Sum of the Evidence: Micron is in a very bullish weekly cycle pattern with positive weekly momentum. Given these conditions, we would expect sell-offs to be contained to the rising intermediate-term Fibonacci supports beginning at 56.46 until the next intermediate-term low forms. The next projected intermediate-term low is due between the end of April and the end of May. Once the next intermediate-term low forms, there is a likelihood the stock tests 65 by July.
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