Micron Technology Inc manufactures different kinds of memory such as DRAM, NAND, NOR and 3D XPoint. It’s extremely profitable and undervalued business. It’s net profit margin is 50%. Return on Capital is 60% and it is dramatically undervalued. It is traded at x4.5 Price-to-Free-Cash-Flow.
On the monthly chart below you can see a huge [A]-[B]-[C] move up off 2009 lows.
I count that rally as a wave [ 1 ] up. Since it topped in March 2018 it has been in a corrective wave [ 2 ] down.
As you can see this corrective wave [ 2 ] follows an expanded flat pattern. What that means is that a corrective wave B up that topped at 64.66 in May 2018 managed to make a new higher high over the high reached by wave [ C ] of [ 1 ] up.
The final wave C of [ 2 ] may stretch to 223.6% of the initial drop of wave A of [ 2 ]. Moreover, we know that the final wave C of [ 2 ] down should be subdivided into five waves of a smaller degree. On a daily chart below you can clearly see a subdivision of that decline. I count the previous low made on 26 Dec 2018 as the bottom of wave ( iii ) down. That means that we need to see a pullback up in a corrective wave ( iv ) up and then another decline to a new lower low in the wave ( v ) down.
Before we top in that corrective wave ( iv ) up it would be premature to estimate a target for the final decline in the wave ( v ) down. However, I can note that there are two congestion of fibs that could become the the targets where decline off the top may get completed and a new rally may start. The upper green target box is located in between of $24 and $21. That is the most likely target at this point. The lower green target box is located in between $15.80 and $12.60.
The next trading setup would be to go long if and when wave ( b ) down retests the December low. The idea behind that long would be to ride a wave ( c ) of ( iv ) up.