Memory chipmaker Micron Technology (MU, Financials) mounted a dramatic comeback as traders defended a crucial technical support level.
Shares bounced off the 100-day moving average near $727 and soared almost 18% to about $872 in midafternoon trading. That level also served as the bottom of a falling wedge formation that helped bring to a halt a nearly monthlong loss of nearly 25%.
The rally was good but the chart still implies resistance ahead. Micron falls below a falling trend line and its 50-day moving average of around $962. Heavy trading volume on prolonged moves above such levels would be a stronger indication of a trend reversal.
Momentum signals are mixed, too. The relative strength index was at 46.28, below the neutral threshold of 50. The moving average convergence divergence line held below its signal line, suggesting continued weakness.
Shares of Micron are up roughly 206% this year and 661% from a year ago, even with the current dip. Investors will now watch to see if the rebound develops into a higher low or fizzles out as the stock reaches overhead resistance.