Micron Stock Drops 4.75% As Bearish Signals Test Key Support At $117

Micron Technology (MU) declined 4.75% in the most recent trading session, closing at $118.61 on substantial volume of 32 million shares. This analysis examines key technical indicators to assess the stock's trajectory.
Candlestick Theory
Recent price action shows a bearish reversal pattern forming near the $130 psychological resistance. The June 26 peak at $129.85 established a significant resistance level, while the July 14 close near $118.61 tests immediate support around $117.02 (intraday low). A cluster of long upper wicks in late June signaled distribution, followed by three consecutive lower highs, suggesting weakening momentum. Key support now resides at the June 20 swing low of $120.38.
Moving Average Theory
The 50-day SMA near $114.65 remains above the 100-day ($106.80) and 200-day ($97.30) averages, maintaining the primary uptrend structure. However, the price recently crossed below the 50-day SMA ($120.40), indicating short-term bearish momentum. A potential death cross looms if the 50-day SMA descends through the 100-day SMA – currently separated by 5.7%. The 200-day SMA continues rising, providing a long-term bullish foundation.
MACD & KDJ Indicators
MACD (12,26,9) shows a bearish crossover below the signal line, with histogram bars extending negatively since July 9. KDJ exhibits an oversold reading (K=18, D=24, J=6), though divergence exists: price made a lower low on July 14 while KDJ's trough was higher than its July 7 bottom. This hidden bullish divergence suggests weakening downside momentum despite the price drop.
Bollinger Bands
Volatility contraction is evident as bands narrowed to a 15% width versus 23% in early July, preceding the breakdown below the 20-day SMA. Price now trades near the lower band ($116.80), typically indicating oversold conditions. A sustained move below $116.50 would signal increasing bearish control, while recovery above the middle band ($122.30) could restore bullish sentiment.
Volume-Price Relationship
Distribution patterns emerged as the June 26 peak ($129.85) occurred on year-to-date volume of 62.7 million shares, followed by lower volume on subsequent rallies. The recent 4.75% down day featured 32 million shares – above the 20-day average volume of 24 million – confirming bearish conviction. Down volume has exceeded up volume in 9 of the last 12 sessions, indicating persistent selling pressure.
Relative Strength Index (RSI)
The 14-day RSI reading of 36 approaches oversold territory but hasn't breached the 30 threshold since April. Current levels mirror mid-June conditions preceding a 10% rebound. While not yet signaling oversold, the divergence with KDJ warrants monitoring – both oscillators show less momentum than price would suggest during this decline.
Fibonacci Retracement
Using the swing low of $84.91 (August 5, 2024) to the $129.85 high (June 26, 2025), key retracement levels are:
- 23.6%: $119.25 (current price is testing this level)
- 38.2%: $112.68
- 50%: $107.38
The 23.6% Fibonacci level converges with the psychological $120 support. Holding above $119.25 would maintain bullish structure, while failure opens risk toward $112.68 where the 100-day SMA and volume support coincide.
Confluence & Divergence
Convergent bearish signals appear between the MACD crossover, breakdown below the 50-day SMA, and volume-confirmed price drop. However, the KDJ/RSI divergence and Bollinger Band positioning suggest oversold conditions are developing. The $117-$120 zone represents critical confluence between the 23.6% Fibonacci level, July 14 low, and June swing low – a breach would likely accelerate selling toward $112.68 support.