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PreMarket Prep Stock Of The Day: Micron Technology

Joel Elconin

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.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

The clear leadership in this market coming off the March low has been technology stocks.

The strength in that sector continues Tuesday after the third-quarter beat from Micron Technology, Inc. (NASDAQ: MU), the PreMarket Prep Stock of the Day. 

Micron On Sale In March: As high as Micron was earlier in the year, it was nowhere near where it was in the tech bubble, when it topped out at $97.50 in July 2000.

Of course, during that period, price to earnings ratios and valuations were meaningless.

The issue peaked in February just above its January high ($60.56) at $61.19. During the March massacre, the issue bottomed at $31.13. That low came in just under the pair of monthly lows from May ($32.18) and April ($32.14) of 2019 and just above its January low ($30.75).

Rebound Off The Low: Just as the issue overperformed on the downside— falling 50% compared with the broad market decline of 35% — it outperformed on the rebound as well.

View more earnings on MU

While the S&P 500 index increased 32% at its peak earlier in the month, Micron was higher by 75% when it reached $54.82 on June 5.

Retreat Into The Print: Ahead of today’s report, the Street was leaning to the sell side.

Coming off its early June high, Micron made a quick dash to $47.10 and rebounded. That level was revisited Wednesday of last week, when it bottomed out at $47.28, and Monday, when it reached $47.58.

Q3 Beat: After the close on Monday, the company announced a third-quarter EPS beat of a nickel along with a slight sales beat.

Micron did not offer any forward guidance, but said it anticipates long-term NAND industry bit demand in the 30% range.

After-Hours Price Action: When Micron was being discussed on PreMarket Prep, it was trading at the $52.50 area, with the after-hours high standing at $52.85. Since that high coincided with its June 19 high of $52.75, the author of this article identified that as a major resistance level and speculated whether it would be reached during the regular session.

After a higher open, Micron had a brief dip Tuesday to $51.15 and attempted to take out the after-hours high, but as of noon, it had only hit $52.47.

The stock ended Tuesday's session up 4.83% at $51.52. 

The full discussion on the issue from today’s show can be found here.

Photo courtesy of Micron. 

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