Caution ahead of earnings as indicators suggest overbought for near-term

Baird and Citibank analysts have upped their 12-month price targets on Micron heading into the firm’s earnings due on Wednesday. Nonetheless, looking at the chart for the near term, the stock looks somewhat overbought. Currently trading at around $140.94 a share, we can see last week’s candlestick suggests some weakness in momentum. The last time a similar candlestick appeared was back in April when a sell-off followed through into the following week. Though it is not guaranteed that a similar scenario will occur once again, the volatility of last week seems more significant than that of in April. Looking at the RSI, back in April it was heavily overbought. It is currently also suggesting that the stock is now overbought, however, the MACD is still on the rise which is portraying a mixed outlook. Hence, caution amongst traders and investors should remain going into the earnings. Near-term support is at last week’s low of $135.75, a break below it could see a retracement toward the April highs of $129.65-$130.51. The focus on the upside is now the level of $145.33 followed by the all-time high of $158.38.