Micron Technology, Inc. (MU) Bulls Look for a Breakout

Micron Technology, Inc. touched its newest 12-year high out of the gate

Digital Content Group
Dec 8, 2014 at 10:29 AM
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Micron Technology, Inc. (NASDAQ:MU) matched a 12-year high of $36.50 on Friday, and has already topped that mark this morning, touching $36.59 minutes ago. At last check, however, the shares were off 0.4% at $36.36. In options land, the April 27 call saw the biggest translation in open interest over the weekend -- adding nearly 7,800 contracts -- suggesting fresh bets were placed to end last week.

Taking a quick step back, calls outstripped puts by a more than 1.5-to-1 margin on Friday. The most active MU strike by a mile was the deep in-the-money April 27 call, referenced earlier, where 8,001 contracts changed hands. The vast majority did so at the ask price, suggesting newly bought bullish bets.

While the calls are currently in the money, at-expiration breakeven on the trade is $37.20, or the strike plus the volume-weighted average price of $10.20. This represents a level not explored since March 2002, and a 2.3% premium to MU's current perch.

Regardless, Micron Technology, Inc. (NASDAQ:MU) has been a monster on the charts, advancing more than 67% year-to-date. If this trend continues, a short-covering rally could materialize, as nearly 9% of the equity's float is sold short. This represents more than a weeks' worth of pent-up buying demand, at MU's average daily trading volume.


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