Analyst Targets 90% Upside for Micron Stock

MU stock has never traded north of the century mark

May 15, 2018 at 10:31 AM
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Shares of Micron Technology, Inc. (NASDAQ:MU) are popping today, after Stifel boosted its price target to $101 from $95 -- a nearly 91% premium to last night's close, and the highest MU price target on Wall Street. The brokerage firm cited expectations for rising first-quarter DRAM prices, and said, "the NAND flash market is growing and far from collapsing." At last check, MU stock was up 0.6% to trade at $53.31 -- pacing for their highest close since April 18.

Today's positive price action just echoes Micron's recent trajectory. In the wake of a recent "buy" signal, the shares have added 16.1% so far in May, and wrapped up a six-day win streak last Thursday. However, the equity appears to be running out of steam in the $53.50-$54.00 region -- home to a 38.2% Fibonacci retracement of MU's rally from its February lows to its 17-year peak of $63.42 on March 13.

Options traders have been getting nervous amid this recent rally. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MU stock's 10-day put/call volume ratio of 0.35 ranks in the 82nd annual percentile. While this shows more calls have been bought to open over puts on an absolute basis, it indicates the pace of put buying has been quicker than usual.

Echoing this is Micron's Schaeffer's put/call open interest ratio (SOIR) of 0.73, which ranks higher than 97% of all comparable readings taken in the past year. Simply stated, options traders are more put-heavy than usual among contracts set to expire in three months or less.


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