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Investors Business Daily
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DAVID SAITO-CHUNG

After A 102% Rip Higher In 2025, Is Micron Technology Stock Delivering A New Buy Point Soon?

William O'Neil, the late founder and longtime chair of Investor's Business Daily, often liked to say you buy on fundamentals and technicals, but then sell on technicals. Tuesday's IBD 50 growth stock Micron Technology might be a "sell" on technicals, but could it later become a buy again based on new technicals? Let's investigate recent chart action in Micron Technology stock.

Headed into Tuesday, the final trading day of the third quarter, Micron Technology stock holds a topflight 99 Composite Rating on a scale of 1 to 99. This means in terms of fundamental, technical, and fund sponsorship metrics, Micron stock ranks higher than 99% of all companies in the IBD stock database.

Micron Technology Stock Today

In early September, Micron carved out a cup with handle pattern that began with the stock peaking at 129.85 in late June. After a relatively mild 20% correction, within the normal range of this key chart pattern, Micron Technology stock bottomed out at 103.38 on Aug. 1. Then it quickly formed the cup's right side, then drifted lower for nearly four weeks.

As the handle formed on the cup, sellers exited the stock. But volume dried up, indicating a relatively limited number of holders willing to sell. Indeed, they did not cause Micron Technology stock to dive as sharply as it did when the left-side of the cup pattern formed.

Then on Sept. 5, amid a confirmed uptrend in the stock market, Micron broke out past the 128.60 buy point, or the highest price within the handle. Volume rushed 34% above average, highlighting robust demand for shares. In the space of just six trading sessions, the gain from this handle pivot point exceeded 20%.

That's exactly what strong growth stocks do in a bull run in the market.

In recent weeks, Micron Technology stock reached a peak of 170.45, or nearly a 33% profit. An investor who bought correctly could certainly take at least partial profits. As often discussed during the daily IBD Live show on Zoom, some shares could get sold at the 20% profit level or higher while a core position could remain in the portfolio. Why? Give a good stock the chance to develop into a super winner.

Micron Technology Stock: A New Pattern Emerging?

Meanwhile, the recent pullback has been light. And continued sideways action might in fact turn the chart action into a new chart pattern: the high, tight flag.

This is such a rare pattern, and most growth stocks that create one actually fail after breaking out. So, all the stars must get aligned. First, let's consider what the pattern parameters must be: 1) a minimum 100% gain from virtually any price over four to eight weeks; and 2) after that flagpole is built, tight trading action in which the decline from the latest high does not exceed 20% to 25%.

Micron Technology stock, however, did not quite meet that first parameter. The gain, for instance, from the low of the cup at 103.38 to the current peak of 170.45 is just 65%. Nonetheless, the recent price move reflects the "spirit" of the rare, bullish patterns.

Second, a flag on an excellent high, tight flag tends to develop in four weeks or less. Ideally, the lighter the drop the better. Why? It indicates few investors are willing to dump their shares. This acts as an artificial restriction in the supply of readily available shares to buy. When an institution or two or three desperately want to build a large position and do so quickly, they must bid the stock up, fueling a potential breakout.

Patience Might Pay

So at this point, it's still too early to call a high, tight flag in Micron Technology stock. The flag portion, just eight sessions long, needs perhaps at least seven more trading days of time to develop. And as discussed earlier, the stock did not meet the requirement of a minimum 100% move over four to eight weeks. Still, the stock deserves close watch.

The character of Micron Technology stock changed in late May, when shares bolted above the 200-day moving average. Since then, it's outperformed the S&P 500 and other key benchmarks. And the company has successfully grown its fundamentals by pivoting into the AI infrastructure market.

Over the past two quarters, earnings soared 208% and 157% above year-ago levels, respectively, as sales rose to $9.3 billion and $11.32 billion, up 37% and 46%. Pretax margin hit 34.8% in the August-ended fiscal fourth quarter.

Wall Street analysts on consensus see Micron's earnings cruising 89% higher to $15.67 a share in the new fiscal year that ends in August 2026. They then anticipate a slow down to 12% growth in FY 2027. This earnings progression is a major change from the start of the 2020s, when the Boise, Idaho-based company's profit plunged 55% to $2.83 a share in fiscal 2020.

Best Stocks To Watch

These recent IBD 50 Growth Stocks To Watch picks are among the best stocks to watch:

Company Symbol  Buy point Type of base
Arcutis Biotherapeutics 18.15 Cup with handle
Palantir Technologies 190 Cup base
Interactive Brokers 68.07 Cup base
American Superconductor 58.42 Cup base

Please follow Chung on X/Twitter: @saitochung and @IBD_DChung

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