Monitor These Key Chart Levels for Micron Technology (MU) Shares
Investors in Micron Technology (MU) have reason to be optimistic as the chipmaker is set to receive $6.1 billion in federal grants to help build its domestic facilities, according to a report by Bloomberg. This news has propelled Micron shares higher in premarket trading, signaling positive sentiment towards the company’s future prospects.
Government Grants and Loans
The Biden Administration’s CHIPS and Science Act of 2022 aims to boost domestic chip production and reduce reliance on international suppliers, particularly China and Taiwan. Micron’s potential $6.1 billion grant, along with access to loans similar to those received by industry giants like Intel and Taiwan Semiconductor Manufacturing Co., underscores the government’s commitment to supporting the semiconductor industry.
President Biden is expected to make the official announcement in Syracuse, New York on April 25, coinciding with Micron’s plans to build several chip manufacturing plants in the region. This strategic investment aligns with Micron CEO Sanjay Mehrotra’s vision of expanding the company’s production capacity while leveraging government incentives to offset international cost differentials.
CHIPS Act Impact
The CHIPS Act has already allocated significant funds to various chipmakers, including Samsung Electronics, Intel, and GlobalFoundries, highlighting the government’s proactive approach to strengthening domestic semiconductor manufacturing. New York Governor Kathy Hochul emphasized the positive impact of the CHIPS Act on the state’s economy, projecting a $100 billion investment and substantial community benefits.
Chart Analysis
From a technical perspective, Micron’s share price has exhibited strong bullish momentum, breaking above a 20-month ascending channel and a previous double top pattern earlier this year. While the stock recently experienced a pullback as investors took profits, key support and resistance levels can guide future price movements.
Investors should monitor the $97 level as a potential support zone, where the price aligns with the top trendline of the ascending channel and the twin peaks of the double top pattern. If the stock continues its upward trajectory, resistance may be encountered near the record close around $130.
As of early trading, Micron shares were up 2.1% at $118.75, reflecting a significant gain of nearly 90% over the past year. The positive news regarding federal grants and loans has bolstered investor confidence in Micron’s growth prospects.
Conclusion
The impending federal grants and loans for Micron Technology underscore the government’s commitment to strengthening domestic semiconductor production. Investors should closely monitor key chart levels, such as the $97 support and $130 resistance, to gauge potential price movements in Micron shares.
Overall, the outlook for Micron remains positive, driven by favorable industry dynamics and strategic investments in domestic manufacturing capabilities. As the semiconductor sector continues to evolve, Micron stands to benefit from government support and its innovative product portfolio.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute investment advice. The author does not own any securities mentioned in this article.
Original Source: Investopedia
