Micron Shares Soar on Strong Earnings and Promising Outlook
Micron Technology (MU) saw its shares climb in extended trading Thursday following better-than-expected results and a robust outlook. The chipmaker’s positive performance was largely driven by soaring demand for artificial intelligence (AI).
The company’s data center revenue tripled in the fiscal second quarter compared to the previous year. This growth was due to high-bandwidth memory chips used in AI systems. Micron’s collaboration with Nvidia (NVDA) further fueled its success.
As of Thursday’s close, Micron shares had risen 22% since the beginning of the year. This surge in demand for AI offerings helped offset the moderate demand for chips used in smartphones and PCs. The stock climbed 1% to $104 in after-hours trading.
Potential Symmetrical Triangle Breakout
Technical analysis suggests the stock may be poised for further gains. The shares have been trading within a symmetrical triangle since September of the previous year. The stock found buying interest near the triangle’s lower trendline, indicating a potential breakout above the pattern.
Key Overhead Areas to Watch
A move above the symmetrical triangle could initially target the $107 level, an area of overhead resistance that includes the 50-week moving average. Breaking through this resistance could trigger a rally towards $130. Investors might look for exit points near last year’s April peak, which aligns with closing prices near the stock’s all-time high (ATH) set in June.
Using bars pattern analysis, which considers the stock’s uptrend from October of the previous year to June, a potential target of about $200 is projected, which is almost double Micron’s Thursday closing price. This projection is informed by a previous symmetrical triangle on the chart, providing insights into future stock movements.
Crucial Support Level
During pullbacks, investors should monitor the $85 level. This area is around a range of lows from August of the previous year and a consolidation period from December of the previous year to January.
Disclaimer: The comments, opinions, and analyses expressed are for informational purposes only and do not constitute financial advice.
