Micron Technology May Get another Boost
The upcoming quarterly earnings by Micron Technology, which is widely expected after the market close on June 26, promises lots of mental food for investing minds, taking into consideration a clear and long-term uptrend in combination with several days of a retracing pattern on technical charts. A technical picture became rather contradictory at the particular moment. One of the major leaders in the artificial intelligence (AI) memory chip industry has thoroughly enjoyed this hyping AI party, as its share price paved its track from nearly $85 at the beginning of 2024 to above $157.5 only one week ago when it set a new all-time record. Then some profit taking followed to lead the market's pullback to $135.70, where the most brutal bulls immediately bought it out to take advantage of a more than 13% price discount compared to recent highs.
To me this short game may not be over yet, so that the fleeting downward run still has a chance to pierce the next and strong support area lying approximately between $125 and $128.50. Frankly, I consider such a moderate plunge as a quite possible scenario even in case of slightly better than expected numbers of both corporate revenue and profit, because too many positive things were already priced-in and done, especially in the period from April to June. The Wall Street analyst pool "officially" expects Micron's Q2 earnings per share of nearly $0.48 on $6.66 billion of revenue, compared to $0.42 per share on $5.82 billion in Q1, with only about $4 billion per quarter being available on average in 2023. It's too tough to beat such extra expectations amid record chip sales' harvests already.
Meanwhile, I also believe that a "frying pan" effect would not allow a one-time needle stick to leave any notable marks at this technical support surface, so that summertime would heal it very quickly. Thus, adding to Micron buy positions during a very first attempt to touch described or some lower price range could be a reasonable behaviour in the circumstances, especially good for aggressive AI-based portfolio strategies.
By the way, here is a recent example of very quick profit taking on NVidia, as soon as it touched $140 per share, followed by a large 15% retracement during three working days, including a 6.68% pullback only in one trading session this Monday. Yet it did not prevent the crowd of bulls from starting to buy it decisively the next day, so that it jumped by more than 2% from $118 to $121 on pre-market trading today. A good example of throwing the hyping flagship stock from cold to flame, so that it could go another double-digit percentage up before one can even blink.
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