Market Overview

Micron Rebounds After China Bans Chips, But Market Cycles Say More Downside Looms

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Micron Technology, Inc. (NASDAQ: MU) traded 2.6 percent higher on Thursday, bouncing back after China imposed an injunction on its chips earlier this week, which pushed shares lower.

On Tuesday, Taiwanese chipmaker United Microelectronics Corp (NYSE: UMC) announced that the Fuzhou Intermediate People's Court had ruled that Micron had infringed on its patents. This led to the preliminary injunction, which would stop Micron from selling 26 products in China. However, today Micron reiterated its quarterly sales guidance, emphasizing that the injunction would only impact its overall sales by 1 percent. Investors found comfort in the affirmation, pushing shares higher.

In analyzing the weekly chart below, we can see that Micron is in the declining phase of its current minor cycle. After this we see a bounce, but we expect that to fail below the peak for the current intermediate cycle. As such, Micron may drop further as the downward pressure from two cycles converge, possibly into October.

Micron Technology Stock Chart with Weekly Bars

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel

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Micron's Latest Earnings Call Was A 'Body Blow To The Bears': Analysts Weigh In

Micron's DRAM Trends, Cost Leadership, Buyback Potential Win Bullish Sell-Side Initiation

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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