Micron's AI-Fueled Chip Rally: Key Price Levels to Watch

Micron Technology (MU) shares have been on a tear, leading the AI-fueled chip rally and notching a record high following strong earnings. As investors eye the next move, here are the key price levels to watch.

Micron's stock surged 14.1% on Thursday, March 7, 2024, to close at 109.85, after earlier hitting an all-time high of 113.50. This impressive performance was driven by the company's fiscal second-quarter results, which beat expectations and showcased robust demand for its high-bandwidth memory DRAM chips, particularly from customers investing in data-center infrastructure for artificial intelligence (AI).



As Micron's stock continues to rally, investors should keep an eye on several key price levels that could indicate further upside or potential resistance. Here are the levels to watch:

1. Overhead Resistance Levels:
* $110: This level represents the 200-day moving average and a trendline that links multiple peaks and troughs on the chart between March and December. A break above this level could signal a continuation of the rally.
* $130: A more bullish advance may fuel a rally to this level, where investors could look for exit points near the April peak, which also sits alongside a range of comparable prices on the chart from May to July.
2. Important Support Levels:
* $97: During retracements, investors should initially monitor if Micron bulls can defend this level. This area, currently sitting just 2% below Monday's closing price, could encounter support near a horizontal line that connects a range of comparable price action on the chart dating back to early March.
* $85: A breakdown below the $97 level could see the shares revisit lower support around $85. Investors may look to accumulate stock in this region near last month's low, which aligns with the prominent August and September troughs.



In conclusion, Micron's AI-fueled chip rally has pushed the stock to record highs, and investors should keep an eye on key overhead resistance levels around $110 and $130, as well as important support levels near $97 and $85. As the semiconductor industry continues to benefit from robust AI demand, Micron's strong earnings and favorable outlook suggest that the rally may have further to run. However, investors should remain vigilant and monitor these price levels to capitalize on potential opportunities and manage risk.

Disclosure: The author does not own any shares of Micron Technology (MU) at the time of writing.