Today we will take a look at Micron Technology, a company that engages in the provision of innovative memory and storage solutions. Time to check the Technical elements on the chart:
1) From 2018 until November 2020 the price was inside a massive range until we saw the breakout of it and a 50% bullish movement from that situation towards the top of the bullish impulse
2) From April until today the price has been consolidating on a clear corrective pattern where we can define both top and bottom edges
3) How can we know that the structure is finished? Two reasons here: first we have clear edges (previous item) and second the structure has made contact with a key level, in this case, the ascending trendline.
4) Now we have a breakout of the corrective pattern. Remember that Technical Analysis is a statistical discipline, which means that we are never gonna have certainty about a situation. However, we know that if we engage in quality situations over certain periods, we will be able to observe consistent results.
5) We are not taking setup on this stock, (we already have exposure on other assets). However, it's an interesting situation to wait for a throwback (retest of a broken structure). IF that happens, we have defined an activation level as you can see on the chart (ALWAYS ABOVE THE TRENDLINE)
6) Depending on how aggressive is the setup you are taking, the invalidation level can be: FIRST below the whole structure 65.00 / SECOND below the throwback (this setup provides a massive risk to reward ratio, however, is prone to a quick stop loss)
7) Targets: IF I would be executing a setup here, I would protect my setup once the price reaches the previous top, which shares a major resistance zone that you can see on the weekly chart (2% below that, I want to be risk-free) / Now, the places to close setups on profit can be the first or 2nd Fibonacci extension. The expected duration of a movement like this may be between 200 to 300 days.
8)RISK: This is the formula I use to trade: I never have more than 5 setups at the same time NEVER EVER. And the maximum % of risk I take on any setup is 3% (ONLY with a STRATEGY THAT YOU HAVE a lot of EXPERIENCE WITH). Let's understand this better, most of my setups happen on the daily chart, which means that time resolutions are between 2 weeks to 3 months. Another rule I use is that my setups must happen on uncorrelated assets example: NFLX / BTCUSD / XAUUSD / FCX / AMZN. So my worst-case scenario is losing all at the same time which means a -10% to -15%. That's more than acceptable for me. And the most probable thing is that I would be able to open 4 to 5 new setups 1 to 2 months later. That's why this type of trading style is so secure. Even in apocalyptic scenarios, you would face a manageable loss, and it will take you time to develop new setups (you avoid impulsive trading)
Thanks for reading! Please feel free to share any idea about MU, in terms of technical or fundamental analysis.
1) From 2018 until November 2020 the price was inside a massive range until we saw the breakout of it and a 50% bullish movement from that situation towards the top of the bullish impulse
2) From April until today the price has been consolidating on a clear corrective pattern where we can define both top and bottom edges
3) How can we know that the structure is finished? Two reasons here: first we have clear edges (previous item) and second the structure has made contact with a key level, in this case, the ascending trendline.
4) Now we have a breakout of the corrective pattern. Remember that Technical Analysis is a statistical discipline, which means that we are never gonna have certainty about a situation. However, we know that if we engage in quality situations over certain periods, we will be able to observe consistent results.
5) We are not taking setup on this stock, (we already have exposure on other assets). However, it's an interesting situation to wait for a throwback (retest of a broken structure). IF that happens, we have defined an activation level as you can see on the chart (ALWAYS ABOVE THE TRENDLINE)
6) Depending on how aggressive is the setup you are taking, the invalidation level can be: FIRST below the whole structure 65.00 / SECOND below the throwback (this setup provides a massive risk to reward ratio, however, is prone to a quick stop loss)
7) Targets: IF I would be executing a setup here, I would protect my setup once the price reaches the previous top, which shares a major resistance zone that you can see on the weekly chart (2% below that, I want to be risk-free) / Now, the places to close setups on profit can be the first or 2nd Fibonacci extension. The expected duration of a movement like this may be between 200 to 300 days.
8)RISK: This is the formula I use to trade: I never have more than 5 setups at the same time NEVER EVER. And the maximum % of risk I take on any setup is 3% (ONLY with a STRATEGY THAT YOU HAVE a lot of EXPERIENCE WITH). Let's understand this better, most of my setups happen on the daily chart, which means that time resolutions are between 2 weeks to 3 months. Another rule I use is that my setups must happen on uncorrelated assets example: NFLX / BTCUSD / XAUUSD / FCX / AMZN. So my worst-case scenario is losing all at the same time which means a -10% to -15%. That's more than acceptable for me. And the most probable thing is that I would be able to open 4 to 5 new setups 1 to 2 months later. That's why this type of trading style is so secure. Even in apocalyptic scenarios, you would face a manageable loss, and it will take you time to develop new setups (you avoid impulsive trading)
Thanks for reading! Please feel free to share any idea about MU, in terms of technical or fundamental analysis.