Stock Market Leader Micron Gave A Crystal-Clear Buy Signal. Here's How

Dec 12, 2025 08:01:00 -0500 by KEN SHREVE

Micron Technology (MU) has been a big winner in the stock market this year. And while an earnings sell-off for Oracle (ORCL) cast a pall on several artificial intelligence stocks Thursday, Micron stock is still near highs ahead of its scheduled Dec. 17 earnings report.

Micron stock started rallying with the rest of the market earlier this year after the bullish follow-through day for both the Nasdaq composite and S&P 500 on April 22. But Micron’s big breakout didn’t come until several months later in early September. That’s when it surged out of a cup-with-handle base, a chart pattern that Investor’s Business Daily research has identified throughout decades of market research.

First and foremost, keep in mind that a cup-with-handle base can’t form without a prior uptrend. In other words, a stock must be showing strength before it starts to pull back, take a breather, and digest recent gains.

Look for at least a 25% to 30% increase in price in the prior uptrend. The correction from the top of the cup to the bottom generally should not exceed 33%, although there will be always be exceptions. Some will be shallower and some will be a bit deeper.

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Cup bases that correct more than 50% should generally be avoided. The reason is when a stock pulls back 50% from its high, it’ll need to rally 100% to get back to that point. IBD research shows breakout attempts after steep pullbacks like this are more prone to failure.

In addition, the bottom part of the cup should be rounded and give the appearance of a “U” rather than a “V.” The U-shape gives enough time for weak holders to exit the stock, while a V-shaped recovery doesn’t allow enough time for sellers to fully exit the stock.

micron It’s possible to see heavy volume as the stock corrects and the left side of the cup is formed. Usually, the stock is just following the broad market lower.

It’s also good to see some heavy volume accumulation as the right side of the base is forming. Signs of institutional buying as the right side of the cup forms can give the breakout added strength.

As the stock approaches the left-side high, watch for the stock to drift lower in light volume. This is when attention turns away from the stock and the handle starts to form. Price action should be relatively calm in the handle, not whipsaw and erratic. The pullback should be contained between 8% and 12%.

Micron’s cup-with-handle base showed a modest pullback of 20% and the handle’s pullback was also sound at 12%. The breakout was during the week ended Sept. 5 as seen in Point 1. The buy point of 128.60 was the high point in the handle three weeks earlier, as seen in Point 2.

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