Micron crashes 12% in AI panic but earnings are up 987% — classic dip-buy opport
Thesis
Micron is expected to post nearly 1000% earnings growth thanks to insatiable AI demand for memory chips. Yet the stock just crashed 12% because the entire tech sector is in panic-selling mode. When good companies get dragged down with the broader market despite unchanged fundamentals, it often creates a buying opportunity. The selloff is driven by fear, not by a deterioration in Micron's actual business. Once the panic subsides, the stock should recover as investors realize the AI memory shortage is still very real.
Strategy approach
Build a mean-reversion strategy on MU on the H4 timeframe. Enter long when price is more than 2 standard deviations below the 20-period VWAP and RSI(14) drops below 30. Exit when price crosses back above the 20-period VWAP. Use a 5% stop loss and a maximum 10-day hold period.