Public trading strategy
Chip giant Micron crashing despite 987% profit boom — dip-buying opportunity
Thesis
Micron's profits are skyrocketing thanks to massive demand for computer chips used in artificial intelligence. But right now, fear is taking over the entire stock market, dragging Micron down with everything else regardless of how well the business is actually doing. When a great company gets caught in a broader panic just after reporting amazing earnings, it often bounces back once the fear subsides. This looks like a classic opportunity to buy a strong stock at a temporary discount.
Strategy approach
Build a mean-reversion strategy on MU daily timeframe. Enter long when RSI(14) < 35 and price has dropped at least 8% over the prior 3 sessions. Exit when RSI(14) > 65 or after a 10-trading-day max hold. Use a 5% stop loss.
Markets and timeframes
MUD