This Micron stock chart is sending an ominous signal, if history is any guide

By Tomi Kilgore and Britney Nguyen

The chip company's stock is higher above its long-term trend tracker than during the dot-com bubble or the Windows 95 craze

Micron's stock is in record territory, but BTIG says "good news is priced in."

Micron Technology shares are flying high for all the right fundamental reasons - but by one technical measure, they now look primed for a hard landing.

The memory-chip company's stock (MU) has been on a parabolic ride in recent months and finished January with its biggest monthly gain since February 2000, which was just before the dot-com bubble popped. Rising demand, coupled with AI-driven supply shortages, have led to higher prices and profits for Micron, as well as for some memory-storage companies.

On Monday, Micron's stock surged 5.5%, its fourth record close in the past five sessions, as well as its 13th record close this year. As far as Wall Street is concerned, this rally should continue for a while, as 88% of analysts surveyed by FactSet who cover Micron's stock are bullish.

But some technical analysts - who study a stock's behavior and gauge how it's acting relative to similar times in the past - may have a very different idea on how long Micron's rally can last.

BTIG technical analyst Jonathan Krinsky said Micron's stock is "historically stretched," pointing out that it has been trading further above its 200-day moving average - a widely followed long-term trend tracker - than it ever has before.

The last two times the spread was even close to what it is now, the stock was soon in a bear market.

At current prices, Micron's stock is 147% above the 200-DMA, down slightly from the Jan. 28 closing record of 152% above.

During the dot-com peak of early 2000, that spared widened to as much as 98%.

And when Micron's stock topped out at that time on July 14, 2000, the spread was at 89%. Three months later, the stock was 65% lower; 12 months later, it was still 62% lower.

Meanwhile, the previous record spread was 124% on Sept. 11, 1995.

During that time, the stock had been soaring from the excitement over Microsoft's (MSFT) release of Windows 95, which created strong demand for memory chips, as well as supply shortages and higher pricing and profits for Micron. Sound familiar?

Three months after that peak spread, the stock was 42% lower. And 12 months later, it was down 77%.

As chart watchers will always say, history doesn't always repeat itself. And though Micron's stock is currently at a record high above its 200-DMA, that doesn't mean it can't rise even further above it. And the spread could also narrow with the stock simply not moving, as the 200-DMA is currently rising by just under $2 a day.

But Micron investors who really believe this time is different should keep in mind that investors in July 2000 and September 1995 likely also thought that way.

So at the very least, as BTIG's Krinsky wrote in a note to clients, investors should recognize that despite strong fundamentals, "good news is priced in."

-Tomi Kilgore -Britney Nguyen

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02-02-26 1908ET