Re: Regression Toward The Mean
If the 50 dma moves above the 200, it results in a Golden Cross. Some traders may decide to go long. It is pretty bullish if the moving averages are in alignment.....that is, if it reads as 10/20/50/200 dma. At this time,it reads as 200/10/20/50.
MU is in a Rising Wedge chart pattern, and it got stopped at the upper trendline. Trendlines are strong support and resistance areas. It takes multiple attempts to break thru one. The Rising Wedge is a bearish chart pattern, and they play out 80% of the time. If it plays out, I believe MU could go into the low 30's or even retest the December lows. However, there is a 20% chance the pattern will fail.
Also,there is still enough wiggle room for MU to move a little higher. As the pattern develops, the trendlines move higher giving MU a chance to reach new highs. GL