Chip stock party ends as Meta spooks the market — short the Q3 hangover on Micro
Thesis
We are connecting the record-breaking Q2 rally in chipmakers with the sudden Q3 selloff and the shockwaves from South Korea. After Micron jumped 240% in a quarter, it lost nearly $200 billion in market cap in a single day as Meta's plan to offload computing power signaled a potential ceiling in AI demand. This combination of an overheated rally and a sudden fundamental shift in demand expectations points to further downside panic.
Strategy approach
Build a mean-reversion / momentum-breakdown strategy that enters short MU on D1 when the stock drops more than 2 standard deviations below its 20-day moving average on volume 150% above the 20-day average. Confirm entry with RSI(14) < 30. Exit condition is a close above the 10-day high, or a 15% profit target, or a 21-day max hold.