Key Takeaways
- Micron shares traded sharply lower in extended trading on Wednesday after the memory chip maker and Nvidia partner issued a weaker-than-expected current-quarter outlook.
- The stock looks set to stage a decisive breakdown below a trading range on Thursday, increasing the potential for further earnings-driven selling.
- Investors should monitor key price levels on Micron’s chart around $85, $78, and $72, while also watching an important overhead area near $97.
Micron Technology (MU) shares traded sharply lower in extended trading on Wednesday after the memory chip maker and Nvidia (NVDA) partner issued a weaker-than-expected current-quarter outlook.
While the Idaho-based company said it sees a return to growth in the second half of fiscal 2025, it anticipates consumer-oriented markets to remain weaker in the near term. In prepared earnings call remarks, executives attributed the light outlook to a slower-than-expected PC upgrade cycle and softer auto and industrial markets.
Micron shares fell 16% to around $87 in extended trading. Prior to the after-hours drop, the stock had gained 22% since the start of the year, placing their performance roughly in line with the S&P 500’s 23% return over the same period.
Below we analyze the technicals on Micron’s chart and point out important post-earnings price levels that investors may be watching.
Trading Range Breakdown
Micron shares have oscillated in a trading range between the 50- and 200-day moving averages (MAs) since late September, indicating a lack of clear direction in the stock.
More recently, the price met significant selling pressure near the 200-day MA ahead of the chipmaker’s quarterly report. Importantly, today’s drop occurred on the highest trading volume since the start of the rangebound period, suggesting that larger market participants positioned for post-earnings volatility.
Indeed, the stock looks set to stage a decisive breakdown below the trading range on Thursday, increasing the potential for further earnings-driven selling.
Let’s identify several key levels where the stock may encounter support and also point out an important overhead area to watch during countertrend rallies.
Key Support Levels to Monitor
The first lower level to monitor sits around $85. The shares may find support in this area near a trendline that joins a range of comparable prices between December 2023 and February with prominent swing lows that formed on the chart in August and September.
An inability to hold this key technical location could see the shares decline to the $78 level. Investors may seek buying opportunities in this region near a period of narrow consolidation positioned just below the November 2023 swing high.
Selling below this level opens the door for a retest of lower support around $72, an area on the chart where the shares could encounter buying interest near the July and September 2023 peaks, which closely aligns with last year’s December trough.
Important Area to Watch During Countertrend Rallies
Upon a countertrend rally in Micron shares, investors should keep a watchout for the $97 level. This area on the chart could provide overhead resistance near the trading range’s lower trendline and several similar price points that preceded the March breakaway gap.
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