Micron Technology, Inc. (MU) shares jumped nearly 4% on Wednesday after the company reported solid first quarter financial results. Revenue rose 71.3% to $6.8 billion – beating consensus estimates by $410 million – while earnings per share  of $2.45 beat consensus estimates by 25 cents per share. Second quarter guidance exceeded consensus expectations in terms of revenue but missed consensus expectations in terms of net income.

The company believes that DRAM industry supply bit growth will reach about 20% next year, and it expects to come in slightly below that figure. But Micron believes that NAND industry supply bit growth will reach about 50% next year, and it expects to come in "somewhat above" the industry. This could create opportunities for companies like Lam Research Corporation (LRCX) and Applied Materials, Inc. (AMAT) as suppliers of these technologies, according to Stifel analysts. (See also: Micron’s Sell-Off Presents an Opportunity: MKM.)

Technical chart showing the performance of Micron Technology, Inc. (MU) stock

From a technical standpoint, the stock broke out from trendline and pivot point resistance at $44.71 toward R1 resistance at $47.57. The relative strength index (RSI) remains relatively neutral with a reading of 59.77, while the moving average convergence divergence (MACD) could see a near-term bullish crossover following its breakdown. Traders should maintain a bullish bias on the stock over the coming sessions given the strong earnings.

Traders should watch for a breakout from R1 resistance at $47.57 to upper trendline and R2 resistance at $52.74 on the upside. Looking at the downside, the stock has strong support at the pivot point and 50-day moving average at around $43.51. A breakdown from these levels could lead to a move to S1 support at $39.54 or S2 support at $36.68, although a move to these levels appears unlikely given the modest RSI and strong first quarter financial results. (For more, see: 2018 Will Be Mixed for Chipmakers: Morgan Stanley.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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