"Cut Both Ways:" Analyzing MU Price Action & Options Amid High Volatility

0:00Welcome back to market on close. Shares of micron are bouncing back with the rest of the memory names as the stock did hit an all-time high roughly $471 to share back on March 18th and we've since pulled back more than 20% from those highs before of course today's rally micron stock is still up over 30% on the year and definitely aiding some of the strength as today is we're up over 9% on the session now it's time for options corner and I'm here with Victor Kat our lead market technician to dive deeper into some of the price performance we've seen from micron as of late and so Rick I am curious your thoughts on micron right now how does fairing as far as the recent technical trends yeah nice rebound for these memory chip companies today all the names that were at the top of the SPX are you know micron western digital C gate etc here and you know this kind of is one of those examples where you see how the volatility can cut both ways we had this very overheated trade in these memory companies that has taken quite a haircut here but really you can see you know micron up 315 or so percent during

1:04the past year here versus the semiconductor ETF the SMH 84.6% so you can kind of see if we break it down even further these a storage chip makers are kind of the strongest of the strong this is that group I was just discussing a minute ago including sand disk as well here far far far out pacing pretty much everything else that's part of this chip sector as well so really the outperformance in this area is very notable here but the general thinking seems to be just kind of more of a risk on day there there seems to be some notions that the the Iran more may be moving towards some kind of potential ceasefire but one thing I did notice a price target cut yesterday from city group they cut micron to 425 from 510 so a pretty significant reduction here they did keep their by rating though okay I think this is such a great illustration of exactly what has fueled so much of the AI enthusiasm it has not been really in the hardware software space it has been hugely dominated by memory which is why it's been so felt that we've seen such a repracing at least

2:06off of some of the highs of these names as of late in the last several sessions of course excluding today and so when you assess some of the recent options trends behind micron which again has been our real point of strength outside of maybe the last month or so what are you seeing for here so after our very explosive push to the upside we hit a kind of stopping point here near around 455 initially here we did make some highs beyond that point but they were rather short and they quickly retreated back to that area here so we had this somewhat zigzag type shape here that bounced back and forth for a while it did result in this rather sharp decline here that is seeing a bounce today but for now our relative low point near 312 stands out here that was the lowest point we saw during our stumble here we also have this gap level here that could be a source of potential support if we were to decline once more that's about where we hit our lows today near about 345 also 364 stands out another repeated low area here for now it looks like

3:12we are also hanging out above that area here today so an interesting development potentially when we do look at our moving averages here that we follow our price activity which has been in this sharp downward sloping channel type shape we have broken above that channel now we've also broken above our short term 5 day EMA and dark blue there that comes in near 35760 but for now we have halted at our gold quarterly 63 day EMA near about 372 40 so now we have a couple points to watch in the shorter term here potential kind of bookends for our price activity if we were to keep moving higher the next stop potentially could be our teal monthly 21 day EMA near about 38850 longer term view though 251 day our yearly kind of illustrates how far and how fast we've come here that's all the way back down in the near 250 or so momentum according to our RSI study here we are still below the 50 midline here but we are making a bit of upside progress here look for

4:16that to cross above that 50 midline once more here for a further bullish Q when we do look at our volume profile study in this case here we're seeing that some heavy trading areas that stand out a smaller pocket right here near roughly a 340 or so that stands out as a place where we could see some potential consolidation or support but really we see a rather heavy activity between these general areas of about 375 to 425 here with the most activity near about 420 or so notice as well very heavy volume spikes here these arrows signify volume spikes where the volume was at least 50% above the 50 day simple moving average of volume here so heavy trading its significant lows perhaps could signify greater conviction on the part of these traders yeah and obviously conviction says so remain relatively intact because with the overall markets strength today we've seen a lot of this interest obviously in buying some of the recent weakness and not just micron but like sandisk western digital shares which are also significantly higher so when you assess some

5:20overall options flows I mean is anything really stand out to you to signal that perhaps this could be a trend that lasts beyond just today well today sizzle the options volume relative to the five day moving average came in at 1.4 so elevated activity here looking at the next few monthly expirations too we can see that for example April 17 16 days out about 12.5 percent potential move expected there so definitely some volatility on the horizon here one thing I also do notices our June expiration the expected move roughly in line with those old highs that we saw so that seems to be the range that traders have their eye on as a potential stopping point to the upside in that time frame over the next 78 days options market today 795 thousand options trading hands today at the time I checked here about 65 percent or so were calls the most active month in terms of open interest is that June 18th expiration here so that was typically it's the front

6:20month in this case it is June here one notable trade may 15th 330 strike calls a trader bought for 60 of them for 2.9 million dollars unclear if this was an opening or closing trade though yeah as we are watching markets give back some of their strength in real time we are also seeing a bit of a pullback from at least such and highs and micron but still up firmly about 8.6 percent today so I appreciate it to you Rick DuCat for all of that breakdown on some of the latest options trends and technical trends we're seeing in micron