Micron Minute: Breaking Down Or Sweating It Out?

Approaching the support level while peers breakdown

Sandisk SNDK 0.00%↑ doesn’t look so hot lately, and after breaking down below my support level earlier this month, I’m pretty skeptical about its upside setup. But Micron MU 0.00%↑ hasn’t yet tested or broken its support level. These, of course, are two separate charts and I treat them as such, but sometimes you look at one and see if there are some clues about whether it's further down the path the other will take. So while one of these two is breaking down, the other is still sweating it out, still deciding whether it will break down.

How this breakdown comes about is down to two things, with only one being reliable due to the nature of the rally. At this point in Micron’s parabolic rally, all I have to go on is support levels and structures, with the latter having become weaker as it goes higher - not unusual for a parabolic structure. This means only being able to watch support levels hold or break to know whether we have a bullish setup still in place.

Support has been key these past few weeks as Micron teeters on the edge of holding the last support I have to keep some kind of reliable upside count. Breaking below it would drastically reduce the upside probabilities for the next few months, potentially even longer.

So while Sandisk might have topped (for sure more likely than it was sans breakdown), Micron keeps closing in on the decision level more and more each day, and we're waiting for the breakdown or the hold.

This Micron Minute might be concise, but the implications I’m laying out here are anything but small. If Micron can’t hold the retrace levels I use as support, I’m going to be looking for signs of a top. A three-wave rally off a low would go a long way in providing a sign.

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