Micron Technology, Inc. (MU) Traders Eye a Big Summer Breakout

Micron Technology, Inc. (NASDAQ:MU) is seeing a rare burst of call volume today

by Karee Venema

Published on May 8, 2015 at 1:24 PM

Unlike the broader equities market -- which is seeing big gains today -- Micron Technology, Inc. (NASDAQ:MU) has barely budged. At last check, the stock was up a slim 0.04% at $27.28. Option bulls are clinging to hope, though, with calls changing hands at two times the average intraday pace.

Drilling down, roughly one-fifth of MU's total call volume thus far has centered at the July 33 strike, where 10,009 contracts are on the tape. It appears new positions are being purchased here -- a theory echoed by data from the International Securities Exchange (ISE) -- meaning speculators are betting on a breakout above $33 by July options expiration.

From a wider sentiment perspective, bearish speculators have been busy in MU's options pits in recent weeks. In fact, the stock's 10-day ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.65 ranks just 10 percentage points from a 52-week peak.

Looking at the charts reveals the withstanding skepticism among option traders is warranted, although there is still plenty of room on the bearish bandwagon. Since hitting a 12-year high of $36.59 in early December, the shares are down 25%, yet 81% of analysts maintain a "buy" or better rating, and the average 12-month price target of $39.03 sits in territory not charted since March 2002. Should Micron Technology, Inc. (NASDAQ:MU) extend its slide, a round of downgrades and/or price-target cuts could pressure the shares even lower.

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