Micron Technology (NYSE: MU) has been among the leaders in the bull market that began in 2009 with a gain of more than 1,400% since bottoming in the bear market. In 2013, MU was once again among the biggest gainers in the S&P 500 with a gain of more than 250%. In the first weeks of 2014, MU has gained more than 12% while the broad market has struggled. After a brief and rare pullback, MU is oversold with a PowerRating of 8. Other indicators confirm that MU is oversold. ConnorsRSI has fallen to 9.48 and the 2-period RSI is at 2.99. Both indicators are considered oversold when they fall below 20. Bollinger Bands ® (%b) is at -0.32, well below the oversold reading of -0.20.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 8 on a 5% pullback the next day and selling five days later has been profitable 72% of the time. The average winner has gained 3.9%. Other entries and exits also show high winning percentages and large average gains.
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All data is as of the end of day on 2/25/2014.