Stocks quoted in this article:
Micron Technology (MU – 29-5/16) has collapsed by just over four points, or greater than 13 percent, this morning after the chipmaker was downgraded to "attractive" from "buy" by an analyst. He expects the shares to reach 50 in a year, which is less than his previous estimate of 110. The equity was also cut from "strong buy" to "outperform" by a major brokerage firm.
With today's weakness, the security has plunged to its lowest intraday mark since mid-August 1999. MU is also trading well beneath its 20-month moving average, a long-term trendline that it hasn't finished a month below since September 1998. We view the 20-month moving average as the line of demarcation between a bull and bear market.
In MU's options pit this morning, the near-the-money October 30 call is leading the way on volume of 1,122 contracts. This option has open interest of 204 contracts, meaning that most of this activity should become new positions.