PreMarket Prep Stock Of The Day: Micron Technology

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

When an issue makes a new all-time high or comes within striking distance, it is a difficult investment decision whether to take profits or hope for a breakout. This scenario applies to Micron Technology, Inc. MU, which is the PreMarket Prep Stock of the Day.

Recent Micron Price Action: On Dec. 21, Micron had one of its best days in months, rallying from $82.03 to $90.68. The catalyst for the rally was better-than-expected first-quarter EPS and sales results and the issuance of second-quarter 2022 revenue guidance above estimates.

After one day of consolidation, the move higher continued, with the issue just missing its all-time high from April ($96.96), only reaching $96.75 on Wednesday.

It retreated from that high but was able to post a new all-time closing high at $96.17. From a technical point of view, it was poised for a breakout to the upside.

Unexpected Micron News: Before the opening bell Thursday, the company announced that it sees the output of some computer memory taking a hit by the closing of the Chinese city of Xi'an, where one of its test and assembly plants are located.

The closing of the city was aimed at containing the resurgence of COVID-19. The company will likely meet most of its customer demand, but new supply arrangements may cause delays.

PreMarket Prep's Take, Premarket Micron Price Action: When the issue was being covered on the show, it was trading at the $94.75 area.

“It may be time to ring the register as it nears the psychological $100 resistance area.” said co-host Dennis Dick. “It is value tech and cyclical, money has been hiding out in issues like Micron and may rotate out of it.”

The author of this article used the technicals from the last four sessions to identify the potential price action. On the upside, the issue stalled at the $95 area last Friday and Monday, and sellers may reload at the area after the negative news.

On the downside, a decisive breach and hold of Wednesday’s low ($93.91) may indicate a more significant retreat.

Micron Price Action In Regular Session: The jury was still out on the issue as of 11:30 a.m. EST. After a lower open ($94.40 vs. $96.17), the issue did breach its prior day low, falling to $93.43, but not for long. The rebound off that low was capped in the aforementioned $95 area, as $95.08 stands as the current high for the session.

At this time, the issue has backed off that high and is down 1.79% at $94.45. 

The full discussion on the issue from Thursday’s show can be found here: