Options Corner: MU Aims to Recapture All-Time Highs in Earnings

50.8 billion shares. Micron up nearly 550% year over year. Time now for options corner. Joining us to take a deeper lo at the chart is Rick Duquette our lead market technician. All right Rick what should we on this chart. Yes. Good morning. So micron st quite strong versus its sector group and the SMH semiconductor ETF. We can see purple and teal. Here are the SM and the SSC ETF. Meanwhile micron up here in red up 536% during t past year. So very strong outperformance. memory group of the chip makers here is also the by far the strongest name,pacing pretty much everything else by, you know, many, many, many times here. So we can see when we look at micron more specifically, we have formed a wedge type shape here. Both of our boundary lines are pointing up, but they're converging toward each other as we head into earnings here. We have not e near 1125, nor have we come to those all time highs near 1255 just yet. We can see,a rangebound period here b about 900 to 1036 that we have pushed above thi level here. Now old ceiling has become the floor. So interesting setup to sure. It's we'll have to see if we break down anl back within this range, f wep and start to move into a newtre. So next we can st our moving averages are dark blue. Five day exponentiing average comes in at 1063 or so. And that's the closest one to our current price activity. We can see that our teal 21 day reprng one month is at 1013 or so. At this point RSI our measure of momentum. A similar pattern here a bit different. This one is more triangular shaped, showi that momentum is starting to wane even though we do have a broader, longer uptrend. Very common for momentum to slow heading into earnings. We are above the 50 mid line though. e of a bullish tilt right now. Meanwhile, our volume profile study shows that the heavy trading range in which price has found itself the most is 875 to 995 or so. Not too much above that. We are in a more thinly traded area, especially once we start to get t we would see from a trading volume perspective here. Diane. All right. What's the approach you woue for an example trade there, Rick. Right. So to think about our expected move here for earnings. Our orange box. That one is for the end of this week plus or minus about 7.4%. But for our current example trade here we're going to look at November. green box plus orinus about 19.2%. Roughly liningp with those old highs tha can see here. So a bullish outlook plus one November 20th 1130 1200 1270. Call butterfly a 615 debit here. So it gives us this, you know mountain shape risk profile here. A bullish outlook 51 days to expiration. Max lost 615. Our paid would be the most we could lose in this risk defined trade. If we keep it intact by expiration here profit if we were to expire exactly athat 1200 str would be 6385. So stranger things have happened. But that would not be the most probabilistic outcome here. O break evens 113615 and5 are 6.3 to 18.2% to the upside are expected move about 19% could overshoot that here. But if this trade starts to go in ft simply close it out. You don't have toold it till expiration. If it's ng to look like your winner could potentially turn into a loser by getting back above that 1236 area