Micron Technology, Inc. (MU) was reviewed about five weeks ago, and I wrote that "The $45-$40 area on MU should act as good support along with the rising 200-day moving average line which intersects around $43-$42, however, with a declining OBV line I do not get the sense that investors have been buying MU as prices have declined the past six weeks. A rally above $51 is needed to bring the bulls back, in my opinion."
Looking back over an updated chart this morning (first chart, below) we can see that the $45 area held in early May and prices rallied above $51, and then the bulls quickly rallied MU to near $65. A little "shake out" occurred at the end of May but now MU looks set for another move higher. Let's review the charts and indicators again.
In this daily bar chart of MU, below, we can see that our favorite technical indicators are all aligned on the upside. The shorter 50-day moving average line is above the longer 200-day average and both have a positive slope.
The daily On-Balance-Volume (OBV) line has resumed its climb higher with a new high. Notice that the price dip at the end of May only produced a small and temporary pullback in the OBV line.
The daily Moving Average Convergence Divergence (MACD) oscillator is above the zero line and poised for a fresh outright go long signal.
The bulls are back in control of this weekly bar chart of MU, below, as prices are above the rising 40-week moving average line after its late April "test".
The weekly OBV line has been moving up again and the weekly MACD oscillator crossed to a fresh go long signal.
In this Point and Figure chart of MU, below, we can see an upside price target of $76.
Bottom line: Traders can continue to hold longs in MU and raise sell stop protection to $52. New longs could be added above $65. $76 is the Point and Figure price target but it would not surprise me that higher prices are seen in the months ahead.
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