MU stuck within tight trading range
Micron Technology Inc. (MU) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MU ended the month -2.83% lower at 50.06 after losing $0.68 (-1.34%) today, significantly underperforming the Nasdaq 100 (1.78%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MU as at Jul 31, 2020):
Friday's trading range has been $1.44 (2.84%), that's slightly below the last trading month's daily average range of $1.45. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MU. Prices continued to consolidate within a tight trading range between 49.11 and 50.75 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, Micron Technology closed lower but above the previous day's open today, forming a bearish Harami Candle.
After trading down to 49.26 earlier during the day, the share bounced off the key technical support level at 49.65 (S1). The failure to close below the support might increase that levels importance as support going forward. The stock closed back below the 20-day moving average at 50.48. The market ran into sellers again today around 50.70 for the third trading day in a row after having found sellers at 50.75 in the prior session and at 50.63 two days ago. The last time this happened on June 29th, MU actually gained 4.82% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 50.75 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 49.11 where further sell stops might get triggered. As prices are trading close to July's low at 47.95, downside momentum could speed up should MU mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Micron Technology. Out of 545 times, MU closed higher 53.58% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.17% with an average market move of 1.71%.