The chipmaker will announce its first quarter results today after trading closes
Chip name Micron Technology, Inc. (NASDAQ: MU) is moving up on a bull note before profit today. Specifically, BMO upgraded its stock from “Market Performance” to “Outperformance” and raised its price target from $ 90 to $ 110 shortly before the company’s first quarter earnings report due after close of trading today. In the following, before the event, we will deal with the technical setup of MU as well as the development of the security according to past earnings.
In terms of analyst outlook, Micron’s 12-month consensus price target of $ 118.82 is a premium of 41.3% versus its current level of $ 84.12, up 1.4% versus its current level of $ 84.12 the day, and represents an area the semiconductor name has never seen before. Meanwhile, 17 brokers named the stock “buy” or better in their reports, and only three said it was “hold” or worse.
That optimism should come as no surprise as MU has a history of positive post-earnings moves. In fact, only three of the last eight post-earnings moves have been negative, and the stock climbed nearly 5% the next day in April. This time around, regardless of direction, the options market is pricing in an 8% swing for Friday’s trading, which is slightly larger than the 6.5% move the stock has averaged over the past two years.
Breaking down options activity today, there has been a spike in bullish bets. At noon, 127,000 calls changed hands – three times the intraday average – compared to 34,000 puts. By far the most popular contract is the weekly 7/2 85 strike call, which opens new positions. This means that by the time the contract expires on Friday, traders expect some uptrend for Micron stock.
In the charts, MU recorded a respectable increase of 62.8% over the previous year. The stock recently rebounded from its five-month low of $ 75.71 on June 21, breaking past pressures through the 50-day moving average. Should tomorrow’s earnings reaction coincide with the positive trend, Micron stock could finally break above the two-month pressure of the 100-day trendline.