Micron Minute: This Usually Doesn't End Well
The stock is in a parabolic breakout from a decades-long ending diagonal, and history is pretty clear on how these finales play out.
Well, I got my answer: Micron MU 0.00%↑ is moving higher directly.
A few weeks back, I was waiting for the stock to tell me whether the move off the March lows was wave one of a larger structure or if it was the larger structure itself.
Micron Minute: Either This Is Really Bullish, Or All Of The Rally
The question isn’t whether this is a bullish move; the question is whether this is almost all of the bullish move we see or if it’s still only the first wave of five to come...
The question has now been answered.
We are in the larger rally, which is unfortunate since a wave 1 and a more appropriate wave 2 pullback would have set the stock up for well into the $1,000s (like $1,500 well into), instead of what could only be to $1,000 or slightly more. It’s why I titled the article “Either This Is Really Bullish, Or All Of The Rally.” All of the rally, while bullish, is just the instant gratification version of a bullish setup - give it to me now, but you could have gotten more if you waited situation. A 1-2 wave setup would have been much better for higher targets, though taken a bit longer, and would have had healthy pullbacks.
But the answer we now have isn’t surprising.
Micron is in a decades-long ending diagonal, also something I’ve shared over the last few months. Ending diagonals typically complete with a blow-off type, parabolic rally. Guess what we’re seeing?
That, my friends, is a parabolic move. A breakout of the diagonal structure and going literally straight up.
The hard truth is, parabolic moves always end the same way: a hard reversal and selloff.
I would not be chasing, nor am I, at these levels because of the immense risk found at the end of this particular pattern. The problem is around not knowing where or when the pattern will end. But I do know we’re in the latter stages of it. Could Micron see $1,100, $1,200, or higher still? Yes, this is why I continue to trim opportunistically and not exit completely, even with it accounting for over 16% of my portfolio still. The bottom line is this is a volatile and largely lower degree untrackable pattern. But to see the massive gains I’ve made disappear in weeks when it reverses after holding for 10 years would be a butt-kicking I deserve if I didn’t take profits.
But even if you’re not interested in profit taking, look at the clues. Sentiment is as bullish as it could be for literally any stock right now, as it is for Micron. Twitter is just a bunch of people posting about Micron and how cool they are because they bought it at $400.
As I’ve told you time and time again, the fundamentals could continue on for another year with massive growth. But the stock is its own entity tied loosely to those fundamentals. Sentiment is what drives price movement, and right now, it’s driving into territory with a consistent ending: a lot of hurt bag holders who got in late on the hype.
Avoiding being a bag holder is only one part; I also aim to profit no matter which direction the stock goes. Join Tech Cache’s paid tier to get daily (Founders Edition) and weekly strategies on Micron.