Traders and investors are successful not because of luck, but because of their analytical skills, ability to take risks, and understand their limits. One of the most important analytical skills a trader and/or investor can have is their ability to interpret technical charts. Without sound technical knowledge of a stock, investments often lead to disasters.

As such, Micron Technology, Inc. (NASDAQ:$MU) has addressed its current set up through its technical chart — where a very clear and defined trend is showing. The trend comes from the information given by its 50 and 200-day simple moving averages (SMAs); as a result traders have a strong outlook for Micron’s stock. However, the overall positive outlook for the stock has resulted in a volume situation that could create a weak disposition. This is because of the change in the situation that is occurring in the stock as buyers and sellers are slowly taking shape.

As more traders begin to view Micron to have a good stock outlook, a certain level of indifference rises amongst the traders regarding the stock’s profile. Thus, the success of the stock seems to be mostly based on how traders view the stock. The view should be consistent as long as the stock’s technical chart continues to have clear and defined trends.

When it comes to analyzing stocks for both potential as well as existing trends, it is strongly recommended for traders and buyers to use the relative strength indicator (RSI) and/or Stochastic measures. Successful traders rely on these two methods to gain better insight on the stock — specifically whether or not the stock is overbought or oversold. These two traits of the stock should never be overlooked as it allows for traders to see the directional bearings for a given stock. The overbought/undersold measures help determine a general direction of the marketplace. For Micron, the stock’s reading for its 14-day RSI is 76.67%, which means the stock is overbought. When a stock is overbought, there is a strong possibility that the stock has reached ceiling levels and thus a drop in price could very well be in the future.

The stochastic reading provides a further outlook on the directional movement of Micron’s stock. Over the last 30 days, the stochastic readings have resulted in a score of 96.00%. This means that the stock is overbought at current levels.

Combining the 50 and 100 day SMA readings, as well as the use of the RSI and stochastic measures, the future of Micron’s stock, has mostly emerged and proven to catch the attention of traders who had previously been interested in the stock. Since the stock began its directional move, a +3.13 positive reading has shown in the last month. In the long-term, Micron’s stock has underperformed the S&P500 by 141.87%, creating unpredictability when compared to stocks from the same area. Historically, volatility provides a measure of 32.75%. Overall viability, however, comes from the average true range of the stock — which for Micron comes at 2.66.

Thanks to Micron’s release of a technical chart for its stocks and technical dissection of the stock, it can clearly been seen that Micron’s stock can result in great trading.

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