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

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

May 8, 2015 at 1:24 PM
facebook twitter linkedin


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.
 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 

300x250 - Banner 3 - v1