Technical Analysis – Micron’s upward breakout in danger
June 7, 2023 2:27 pm
Micron is hovering around the 67.41 level as the bears are trying to limit their losses from the May 24 upward breakout. This is the first serious upward breakout from the rectangle that has been dictating price action since June 2022. However, the upleg halted at the 50% Fibonacci retracement of the January 5, 2022 – September 23, 2022 downtrend at 73.31, prompting the current correction.
Bears would love for the correction to continue but the momentum indicators are mixed in this juncture. The Average Directional Movement index (ADX) is not endorsing the current move as it is hovering at its range-trading territory, and the RSI remains just a tad above its 50-midpoint. More interestingly, the stochastic oscillator is moving almost vertically lower and preparing to make a lower low. If this occurs, a bullish divergence will form, potentially opening the door to an even more significant rally than the one seen in late May.
If the bulls remain confident and ignore the current correction, they would try to clear the 67.41 level. They would then aim to retest the resistance set by the 50% Fibonacci retracement at 73.31. Even higher, a break of the September 27, 2021 high at 75.72 could prove significant from a medium-term respective.
Should the bears regain market control, we would target the 63.12-64.64 range and a return inside the recent rectangle. Even lower, the March 15, 2023 upwards sloping trendline could prove tougher to crack, ahead of the key 60.11-60.89 area that is populated by the 23.6% Fibonacci retracement and the 100-day SMA respectively.
To sum up, Micron bears are trying to cancel out the recent upward breakout, but the overall mixed technical picture is providing significant breathing space to the bulls.
Micron is hovering around the 67.41 level as the bears are trying to limit their losses from the May 24 upward breakout. This is the first serious upward breakout from the rectangle that has been dictating price action since June 2022. However, the upleg halted at the 50% Fibonacci retracement of the January 5, 2022 – September 23, 2022 downtrend at 73.31, prompting the current correction.
Bears would love for the correction to continue but the momentum indicators are mixed in this juncture. The Average Directional Movement index (ADX) is not endorsing the current move as it is hovering at its range-trading territory, and the RSI remains just a tad above its 50-midpoint. More interestingly, the stochastic oscillator is moving almost vertically lower and preparing to make a lower low. If this occurs, a bullish divergence will form, potentially opening the door to an even more significant rally than the one seen in late May.
If the bulls remain confident and ignore the current correction, they would try to clear the 67.41 level. They would then aim to retest the resistance set by the 50% Fibonacci retracement at 73.31. Even higher, a break of the September 27, 2021 high at 75.72 could prove significant from a medium-term respective.
Should the bears regain market control, we would target the 63.12-64.64 range and a return inside the recent rectangle. Even lower, the March 15, 2023 upwards sloping trendline could prove tougher to crack, ahead of the key 60.11-60.89 area that is populated by the 23.6% Fibonacci retracement and the 100-day SMA respectively.
To sum up, Micron bears are trying to cancel out the recent upward breakout, but the overall mixed technical picture is providing significant breathing space to the bulls.
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