MU Trade on Dec 21, 2021 09:36 from JRockTrades: Tradervue User Stock Trades.

Big Picture

SPY and QQQ have been choppy with inflation and covid concerns as headwinds that have slowed the overall market moving higher in recent weeks.

SPY 30-min Chart

MU 4Hr Chart

VIX: 22.5 falling to 21 today
MU RVOL today: 2.74
Earnings Results:
EPS: 2.16 vs 2.11 estimate
Rev: $7.69B vs $7.67B
Guidance: Q2 2022: $7.5B and eps $1.95 vs $7.3B and eps $1.87 estimates

MU reported after the bell yesterday and it was a triple beat. They raised guidance for Q2 of 2022 My thought process is that the earnings and guidance are so good that even though you'd get some profit taking on the open, longer term fund managers would want to get involved and eventually push this higher. Lots of raised targets today in the 90-115 range.

MU Earnings Reaction until the open

The initial earnings reaction was from 82 to 88 and it held there with no real retracements. By the pre-market it had pushed over 89. My best case scenario would be a dip and rip. I saw 87 as the best risk to reward entry, but I was willing to get in a little higher if it wasn't going to come all the way to that level.

I took my first try so that with a .35 stop, I would stop out below 87.50, which would hopefully support. That didn't work and I looked to buy lower, with the same .35 stop below the low of the previous wick. That one did hold, though I was willing to take a third try closer to 87 as my last attempt.

I was pretty quick to take profits as MU went back to the HOD. It was very very choppy with large wicks, but I was in from such good prices I could just ignore all the noise. I was down to 20% as it made a new high and retraced. I have my stop at break even and would like to see if over the coming days MU can retake the high of 97. I would like to sell half of my remaining shares at 95 and see what the rest could do.

As the trade progressed you could see the relative strength of MU versus QQQ. The overall market seemed to be dragging this trade down, which didn't do anything to lower my conviction. Since I was in from such good prices it made it super easy to just let the trade work. It is to be seen if my ultimate thesis plays out.

MU Day 1

This is a classic setup for a 2nd Day Play and it looks like with the right market in the QQQs, this could potentially make those analyst targets. I definitely think a touch of the ATH at 96.96 is a possibility.

UPDATE:
MU Day 2 & 3

MU had a middle of the road Day 2 in which I made no changes to my position, but on Day 3 we finally saw real strength. I sold 25% of my swing ahead of 94 and 25% ahead of 95. Gonna watch this to see what the rest of it can do!

UPDATE:

Here is MU in comparison with the QQQ. It made a new ATH yesterday, but the market dragged it back down. With a couple good days in tech, this has a chance of going to 100 and higher.