Micron Stock Surges 4.15% on Bullish Engulfing Pattern and MACD Turn as Fibonacci Levels Suggest $224 Target

Micron Technology (MU) closed its most recent session on 2025-10-23 with a 4.15% gain to $206.71, extending a short-term bullish momentum amid a volatile year-long price trajectory. The stock’s recent surge follows a sharp pullback in early October 2025, where it briefly dipped below $180 before rebounding. This price action suggests a potential shift in sentiment, warranting a multi-indicator analysis to assess trend strength and reversal risks.

Candlestick Theory

Recent candlestick patterns highlight a bullish engulfing formation on 2025-10-23, where the large bullish body (206.71) completely covers the preceding bearish candle (198.47). This pattern often signals a short-term reversal, particularly when accompanied by high volume (19.4M shares). Key support levels can be identified at the 2025-10-17 low of $195.55 and the 2025-10-09 trough of $181.6, while resistance is clustered near the 2025-10-20 high of $214.75. The price’s retest of the 214.75 level could confirm a breakout or trigger a pullback, depending on volume and follow-through buying.

Moving Average Theory

The 50-day MA (calculated from historical data) currently resides at ~$190, while the 200-day MA sits near $140, indicating a strong bullish trend. The stock is trading well above both, suggesting a long-term uptrend. However, the 100-day MA (~$175) is being outperformed by the 50-day, hinting at accelerating momentum. A break below the 50-day MA could signal a short-term correction, but the 200-day MA remains a critical floor.

MACD & KDJ Indicators

The MACD histogram has turned positive after a brief bearish phase in mid-October 2025, aligning with the recent price rally. The MACD line crossing above the signal line on 2025-10-23 reinforces bullish momentum. Meanwhile, the KDJ (Stochastic) oscillator shows overbought conditions (K=85, D=78), suggesting a potential near-term pullback. Divergence between the KDJ’s overbought reading and the MACD’s strength implies caution: while momentum remains robust, exhaustion could trigger a retracement.

Bollinger Bands

Bollinger Bands have widened significantly in recent sessions, reflecting heightened volatility post-October 16, 2025. The price’s retest of the upper band on 2025-10-23 (at ~$214.75) signals overbought territory, increasing the probability of a near-term consolidation phase. If the bands contract again, it could precede a directional breakout.

Volume-Price Relationship

Volume has spiked on recent up days (e.g., 19.4M shares on 2025-10-23 vs. 21.9M on 2025-10-16), validating the price strength. However, the volume on the 4.15% gain is slightly lower than the prior week’s peak, suggesting potential exhaustion. A follow-through surge in volume during the next rally would strengthen the bullish case, while declining volume could indicate a false breakout.

Relative Strength Index (RSI)

The 14-period RSI stands at ~72, entering overbought territory. Historical data from 2025-10-16 to 2025-10-23 shows a rapid rise from ~50 to ~72, indicating short-term overextension. While overbought readings do not guarantee a reversal, the RSI’s proximity to 70 raises the likelihood of a near-term correction. Traders should monitor the RSI’s reaction to the 70 threshold: a sustained close above 70 may prolong the rally, while a drop below 60 could signal a pullback.

Fibonacci Retracement

Key Fibonacci levels from the 2025-04-09 low of $63.7 to the 2025-04-10 high of $78.56 have been extended to the current price action. The 61.8% retracement level (~$194) was tested on 2025-10-22, with a subsequent breakout. The 78.6% level (~$208) is now in play, suggesting the stock could target the 100% extension (~$224) if the trend continues. A breakdown below the 50% level (~$171) would invalidate the bullish case.

Backtest Hypothesis

The RSI overbought signal (RSI >70) has historically yielded favorable outcomes for MU from 2022 to 2025. Backtest data reveals a 59.49% win rate at 3 days, 63.29% at 10 days, and 69.62% at 30 days, with average returns of 1.46%, 2.79%, and 6.96%, respectively. While the current RSI at ~72 suggests a high probability of a short-term pullback, the 30-day data implies that holding through volatility could capture larger gains. Traders might consider a trailing stop-loss near the 100-day MA (~$175) to balance risk and reward, leveraging the RSI’s historical tendency to resolve overbought conditions within 30 days.