Micron Technology Surges 21.76% in 7-Day Rally as Bullish Candlestick Patterns and Ascending Moving Averages Confirm Prolonged Uptrend

Micron Technology (MU) has demonstrated a robust 7-day rally, surging 21.76% with a 1.67% gain in the latest session. This upward momentum is supported by a series of bullish candlestick patterns, including consecutive higher highs and closing prices above key psychological and Fibonacci levels. Key support levels, such as the 200-day moving average ($115.60) and the 2025-04-08 low ($63.52), appear to have been decisively breached, while resistance is now clustered around the 2025-09-11 high ($156.26) and the 2025-04-09 peak ($78.56). The price’s proximity to the upper Bollinger Band (currently $190.96 vs. a 20-day band width of $22.34) underscores heightened volatility, with the band contraction observed in late August 2025 suggesting a potential breakout phase.

The 50-day ($142.34), 100-day ($122.81), and 200-day ($115.60) moving averages form a clear ascending alignment, confirming a multi-timeframe bullish trend. The 50-day MA crossing above the 200-day MA in early September 2025 (golden cross) further reinforces the uptrend. However, the KDJ (Stochastic Oscillator) indicates overbought conditions, with %K ($83.2) and %D ($76.8) nearing 80, while the MACD histogram ($12.3) remains above the signal line ($9.1), suggesting sustained momentum. A divergence between MACD and price action is absent, reducing immediate reversal risks.

Volume has surged in tandem with the price rally, peaking at 57 million shares on 2025-09-11 (up 3.5x from mid-August averages). This validates the strength of the uptrend, though a decline in volume during recent sessions may hint at waning enthusiasm. The RSI (14-period) stands at 72.3, firmly in overbought territory, but historical context shows the indicator has lingered above 70 for extended periods during strong trends, reducing its immediate predictive value.

Fibonacci retracement levels derived from the 2025-04-09 low ($63.52) to the 2025-04-09 high ($78.56) and subsequent rallies identify critical thresholds. The current price ($190.96) exceeds the 23.6% retracement level ($184.43), suggesting a potential pullback target at the 38.2% level ($172.34) before resuming higher highs.

Backtest Hypothesis

The backtest of a strategy buying MU when RSI exceeds 70 and holding for 5 days from 2022 to 2025 yielded a total return of 4.14% versus the benchmark’s 48.22%, resulting in a -44.08% excess return. This underperformance highlights a critical flaw: the 5-day holding period fails to capture MU’s prolonged bullish momentum. The stock’s 21.76% 7-day gain in late 2025 exemplifies extended overbought conditions, where shorter-term strategies would exit prematurely, missing long-term gains. The strategy’s 18.04% volatility and 0.06 Sharpe Ratio reflect its inability to balance risk and reward, exacerbated by the sector’s cyclical nature and Micron’s aggressive capital reallocation (e.g., workforce cuts, CAPEX reductions in 2022-2023).

While the RSI overbought strategy underperformed, the analysis underscores the importance of aligning holding periods with asset-specific dynamics. For MU, which exhibits strong trend-following behavior, strategies incorporating longer holding windows (e.g., 20-30 days) or combining RSI with moving average crossovers may yield better results. Additionally, volume analysis and Fibonacci retracement levels offer actionable insights for managing entry/exit points in a high-volatility environment.