MU Options Play
Micron Technology, Inc. provides semiconductor systems worldwide. The company operates through four segments: Compute and Networking Business Unit, Storage Business Unit, Mobile Business Unit, and Embedded Business Unit. MU reports earnings on June 29, 2017 let us look at a strategy to capitalize on the earnings report.
Technically, the chart looks phenomenal! From the Dynamic Trend Indicator (available on Alphashark.com or email Lance@alphashark.com for link) MU meets all the criteria for a long or if already long stay with the trend. The multiple time frame analysis confirms positive momentum with price above the wave. Overhead resistance is at 32.93 which MU is knocking on currently on the path to new highs. Usually when a stock is approaching new highs weak hands will try to short it leading to a breakout on volume to new highs as the shorts will have to cover. Remember, we want to be strong hands as smart traders and not fight the trend!
As of June 24th, 2017, MU is trading at 31.75 with the expected move for June 30rd option expiration is $3.00 I can find the expected move by adding the ATM straddle for the week of expiration. Therefore, if I add 31.75 + 3.00 = 34.75 as an upside target for an options play expiring on June 30th expiration.
MU Trade idea:
I am bullish on $MU using the Dynamic Trend Indicator with a price target of 34.75 Therefore, I can develop a trade that will take advantage of my expected move with limited capital requirements. The June 30th 33.5 calls are trading at .75 debit, I am looking to buy these and sell the June 30th 34.5 calls for .50 credit. This strategy is a bull call spread for a .25 debit (.75-.50 = .25) My max loss on the trade is $25 per contract with my max gain being $75. This trade offers limited risk with 3-1 risk vs reward set up if $MU trades at or above 34.5 by June 30th option expiration. Written by: Lance Ippolito email: firstname.lastname@example.org
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