Micron Technology Ready for Another Double-Digit Run

by Sam Collins | January 9, 2014 1:27 am

Micron Technology (MU[1]) — Last year, I first recommended this stock in the Trade of the Day on March 25[2], near $10 with a target of $14. Then, on June 7[3], with the stock at $12.56, I increased my target to $16-plus, citing better prices for DRAM and NAND flash products, Micron’s core business.

I upped my target again to $20 on June 27[4] following better-than-expected fiscal third-quarter earnings, strong guidance, and analysts increasing their earnings and price estimates. When the company beat fiscal fourth-quarter estimates, I hiked my price target to $24 on Nov. 14[5].

On Wednesday, Micron’s fiscal Q1 earnings report again smashed estimates when the company reported a 69% sequential increase in revenue from its DRAM products and EPS of $0.77 versus an estimated $0.43.

Following the report, MU broke from a channel consolidation with a powerful breakaway gap that should attract new buyers. Analysts are scrambling to increase their full-year earnings estimates, and it is clear that the stock is under heavy accumulation. 

MACD is on the verge of triggering a new buy signal, so I’m increasing my price target again to $30. However, since this stock could become more volatile, new buyers should only take a half position now and add to it if the newly opened gap is partially closed.

MU Chart
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Chart Key[6]

  1. MU: http://studio-5.financialcontent.com/investplace/quote?Symbol=MU
  2. on March 25: http://investorplace.com/2013/03/trade-of-the-day-micron-technology-nasdaq-mu-3/
  3. on June 7: http://investorplace.com/2013/06/trade-of-the-day-micron-technology-mu/
  4. on June 27: http://investorplace.com/2013/06/trade-of-the-day-micron-technology-mu-2/
  5. on Nov. 14: http://investorplace.com/2013/11/trade-day-micron-technology-mu/
  6. [Image]: http://investorplace.com/wp-content/uploads/2013/12/chart-key.gif

Source URL: http://investorplace.com/2014/01/trade-day-micron-technology-mu-2/
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