📉 Micron’s Selloff (MU): What the Chart and the Market is Telling Us Right Now

A technical deep dive into MU’s post-earnings selloff, key trend shifts, and where traders & investors might look next.

Mar 23, 2025

Hey everyone 👋

This week, I’m diving deep into Micron Technology Inc. (MU)—a stock that’s been grabbing a lot of attention lately after its latest earnings report. Despite delivering better-than-expected revenue and EPS in Q2, MU tanked over 8% in a single day, wiping out recent gains. So what gives?

Well, it’s not always about the last quarter. It’s about what’s ahead—and the guidance for Q3 didn’t exactly scream “strong rebound.” Even with bullish AI tailwinds, the rest of MU’s business still feels stuck in the mud.

Let’s unpack the technical story behind the move, walk through the chart, and discuss where traders and investors might look for entry points—bullish or bearish.

🔍 Price Action Analysis – The Trend Just Turned Sour

Price action is king, so let’s start there.

Micron was cruising just above its 50-day moving average ($96.69), but the selloff sliced right through it, closing at $94.72. That’s a pretty big red flag because the 50-day MA often acts like a short-term support line, and breaking below it can trigger more downside from traders who use moving averages as cues.

Zooming out a bit, the 6-month trend is officially “Bearish” which confirms that this isn’t just a one-day blip. And guess what? The 1-month trend is also Bearish. So we’ve got alignment across short and medium-term timeframes pointing down.

🧠 Plain English Translation: The stock is trending lower, broke key support, and the recent price action confirms we’re not in a healthy uptrend. Momentum is shifting against MU.

⚙️ Momentum Confirmation – Weak, But Not Oversold (Yet)

Now let’s double-check that with momentum indicators.

Relative Strength Index (RSI) is around the neutral zone but pointing downward, signaling that there’s room for more downside before MU gets into “oversold” territory.
No divergence or hidden bullish signals here—momentum is confirming the bearish trend.

🧠 Translation: The momentum confirms the price action. MU is falling with force, and we’re not yet at a level where a bounce becomes statistically likely.

💡 What the Data Tells Us

Let’s apply my 6 rules to really dig in:

Trend & Sentiment: ✅ Clear bearish trend (1M & 6M both red). Any bullish trades here would go against the grain—higher risk.
IV Rank: 📉 23/100 – that’s low implied volatility, which favors buying options, not selling them. But this also means premiums are cheap because the market doesn’t expect fireworks.
Liquidity: 💧 Very Liquid – no issues getting in or out of trades.
Daily Price Move: 🚨 MU is down 8.04% today – big red flag. This violates the 5% rule. You don’t want to chase a move this big.
Earnings Risk: ❌ Just had earnings on March 20 – we’re clear for a while. Nothing upcoming to worry about.
Support & Resistance:
- Support: $91.43 (minor), $83.43 (stronger)
- Resistance: $115.43 and major at $157.02

🎯 Suggested Entry Points – Traders & Investors

🔼 Bullish Scenario (If You Think This Dip is Overdone)

This is a counter-trend trade, so proceed with caution:

Entry for Traders: Wait for MU to reclaim and close above the 50-day MA (around $96.69). That would be a bullish signal. Tight stop at $91.43.
Entry for Investors: You might want to start nibbling between $83-$91, especially if you believe in the long-term AI/data center story and MU's HBM dominance.

Look for confirmation candles and a bounce in RSI before getting involved. Don’t try to catch the knife while it’s falling.

🔽 Bearish Scenario (Trend-Following Trade)

This is the lower-risk setup right now:

Entry for Traders: You could enter now or on a weak bounce up to $96 with a stop-loss just above the 50-day MA.
Targets: $91.43 is the first support zone, but ultimately $83.43 could be the bigger breakdown target.
Options Strategy: Buy a Put Debit Spread 30-45 days out while IV is low. Defined risk, good reward.

📘 The Story This Chart Tells

Micron’s earnings weren’t bad. Wall Street wanted confirmation of a strong Q3/Q4 rebound, and MU didn’t deliver. The stock reacted by breaking key support levels, and technically, it now looks vulnerable to further declines.

There’s long-term promise in AI and HBM, no doubt. But near-term? The chart says caution. The break below the 50-day and confirmation from momentum tell us that traders are pulling back, and investors aren’t convinced just yet.

📌 Summary of Findings

Trend: Bearish (1M + 6M)
Momentum: Negative and confirming the downtrend
Support Levels: $91.43, $83.43
Resistance: $115.43 (big test if bulls return)
IV Rank: Low (favors debit strategies)
Liquidity: Excellent
Earnings: Just passed; no near-term catalyst

📝 Final Thoughts

Micron’s stock just gave us a technical warning shot. This isn’t the time to go all-in on bullish positions unless we see a reversal develop. But if you’re a longer-term investor, this selloff could offer some opportunities if you believe the AI growth story outweighs near-term consumer weakness.

For now? The chart is in the penalty box until I see some healing.

Talk soon and good luck out there! 💡🎯-EC

*Disclaimer The examples in The Options Oracle are my opinion, not financial advice.

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