Saturday, February 26, 2011

Micron Technology, Inc. The Three Stooges?

 The Three Stooges/ Founders of Micron Technology?

While surfing at the top 10 volume of the Nasdaq, I notice one interesting stock that stands out among the rest. I decided to do some studies about it on this stock and it is none other than Micron Technology.
While surfing for more info on this stock, the above picture came out and it mentions that the 3 person above are the founder of Micron Technology. I dont know whether it is real of fake because the 3 persons look like 3 stooges to me. That is how the heading came about.

Another picture that came out while surfing for Micron Technology is the young beautiful chinese lady above which is the promoter of one of the Technology Road Show in Asia. Nice Body!

 Click on the above image to enlarge

Looking at the long term chart, this chart shows that Micron Technology is currently in the range bound trading of between $11.50 and $6.80. Micron is currently testing the very strong resistance at $11.80 and it has failed to overcome it.

Both the MACD and stochastic do not show any recovery or upward signal. Instead, it shows that more consolidation is about to come and bring this stock lower.

 Click on the above image to enlarge

The short term chart shows that this stock might be heading lower to test the 1st support at around $9.40. Although the last 2 candlesticks that show a positive signal, I am not convinced because of the low volume and also the 2 important bearish technical signals which is MACD and stochastic.

The recent 2 up candlesticks may be the work of traders trying to cover back the short position which was aggressively carried out for the past 1 week.

The last 2 candlestick also shows that a candle which is almost simliar to the bullish engulfing pattern, however, I am still not convince this is the change of a recent downward trend, however, I believe this is merely a very short term correction.
What Does Bullish Engulfing Pattern Mean?A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses or "engulfs" the previous day's candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire candlestick from the previous day. (
Looking at the chart, my analysis and sixth sense are telling me that the recent downtrend is just the beginning. More punishment will come for this stock going forward.

Based on the fundamental analysis, Micron recently announced  the 1st quarter EPS of $0.15 which is very much below the analysts concensus of $0.28. This recent earning is a whopping 40% below the estimates. Now it really gives a reason for the continuos punishment of this stock.

Based on the long and short term technical analysis, the fundamental analysis and my sixth sense, I believe this stock will continues to head downward after a 2 days of weak correction. Therefore, my recommendation is to go short for this stock for the near future.

I currently do not own any stock in Micron and I do not to enter any position in this stock as I am currently heavily invested in AXT Incorporated.

Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 

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