Computer processors are in short supply and some analysts say that could continue until the end of the year or into next year. The shortage affects autos, home electronics, smartphones and a host of other industries. As the processor industry ramps up, companies need memory chips to accompany them. That’s a boon for memory-chip maker Micron. The Relative Strength (RS) Rating for Micron Technology (MU) entered a new percentile Wednesday, rising to 82, up from 79 the day before.
The increase is significant because market research shows that the best stocks tend to have an RS Rating of at least 80 in the early stages of their big moves.
Micron Ratings Excellent, Funds Unimpressed
Among other technical ratings, Micron boasts a 96 EPS Rating, of a best-possible 99. Likewise, it carries a 95 Composite Rating and it’s in the No. 33 ranked Computer-Data Storage group, of the 197 industry groups tracked by IBD.
One yellow flag is its D Accumulation/Distribution Rating, on an A+ to E scale. The D rating indicates that funds and other large institutions are selling more shares than buying.
In terms of fundamentals, earnings grew 118% last quarter, to 98 cents per share. The prior three periods earnings were down 22%, then climbed 93% and 63%. Revenue in its most recent quarter rose 30% to $6.24 billion.
Micron Technology holds the No. 1 rank among its peers in the Computer Software-Storage industry group. Other top five ranked companies include disk drive maker Seagate Technology (STX) and NetApp (NTAP).
Micron Technology has moved more than 5% past a 54.92 entry in a first-stage cup with handle, meaning it’s now out of a proper buy zone. Look for the stock to create a new chance to pick up shares like a three-weeks tight or pullback to the 50-day or 10-week line.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This unique rating measures market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock’s price performance over the last 52 weeks matches up against the rest of the market.
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