Danielle Shay on MU, SNDK & STX Technical Analysis & Options Strategies

**SPEAKER_1** (0:00)
Going deeper on tech, joining me right now, Danielle Shay, VP of Options, Simpler Trading. I'm so glad to see you. Thank you so much for being with us. So what's going on with the memory stocks? They're hot, then they're not.
Your thoughts on a name, let's say Opal and Micron, for example, which had been running up, and now when we look this week, it's down, but had been at $12.55, right now it's at $9.67. Some of your thoughts on some of these memory names.

**Danielle Shay** (0:30)
Well, these stocks have pulled back pretty substantially throughout the summer, and I won't be surprised at all if they see continued volatility throughout September and October due to seasonality. However, I continue to love this space and I'm going to continue to invest on this pullback. Specifically with Micron, this stock has a history of rallying going into earnings, and we're just entering that pre-earnings timeframe next week. If you take a look at this stock and look at the past pre-earnings rallies, on average, it moves about 13 percent. So I am long this stock right now.
I am looking for a potential rally going into September, and I love how it broke up above the 50 SMA on the daily chart recently, which is a buy signal.

**SPEAKER_1** (1:11)
Yeah, that's something that everybody's watching. I've heard so many references to the 50-day, not only on Micron, but also just across the board on the NASDAQ. Key levels to watch here. You mentioned Micron here and you are long this one.
Are there others that you also like here? Because at this point, you talked about even being so bullish. You looked at a bullish trade that you said, looking at 1,100 on this name. Could you tell me about that before I move on to Seagate and SanDisk?

**Danielle Shay** (1:42)
Sure. So I love trading 50 simple breakouts. It's one of my favorite moves. And because it is such a common level, it does become a little bit of a self-fulfilling prophecy. When you see a sector underneath that zone and then suddenly you get a nice high-volume breakout, it's just one of my favorite entry points. And so looking at Micron here, I have butterflies on in the options market, 1,112,000 and I'm targeting that for the September expiration series. And so with Micron, that just gives you an ability to put an options trade on that is pretty wide in nature. However, it brings down the cost of the long call pretty substantially, and it really just gives you a zone of profitability. So that's typically how I trade this stock. You don't want to place butterflies in the actual earnings series itself. So I typically do those the week before earnings to capture that rally going into that earnings report.

**SPEAKER_1** (2:38)
And so I know that you've been positioned, you said you're reducing some of the longs, you're ready to hedge with the triple Qs or the SMH if necessary. And you're watching different indicators. First of all, you have September seasonality, which often could be a tough month. The volatility has been on the rise. You talked about put call ratios increasing. But you're still trying to do this until you get a couple of closes below the 50-day moving average on the NASDAQ, right? Is that sort of the premise?

**Danielle Shay** (3:09)
Yes, that's correct. So I mean, even though I will hedge overall, I will still have a few relative strength longs on. And Micron is a great example of a relative strength long that can tend to move against the market. As far as SMH and the QQQ are concerned, both are still underneath the 50 simple on the daily chart. And so when you get to closes below that zone, it is typically difficult to see a rise up above that level, unless you have some incoming volume, some sort of catalyst. Right now, we're just in a little bit of a lull. We don't have very many earnings reports. Of course, we have NVIDIA next week.
And then we have that September seasonality. So I will hedge on a short-term basis. When I see SMH breaking down below this zone, and I have multiple different tickers within SMH breaking down. But ultimately, I'm still buying long-term stocks, and I'm still looking for those relative strength tickers to trade to the upside as well.

**SPEAKER_1** (4:07)
Can these names get back to their all-time highs? Is it sort of like, oh yeah, for sure. It's just sort of technicalities here right now. I mean, we look at names like Seagate and SanDisk. You just talked a lot about Micron. Can these names get to highs? And then tell me a little bit about some of these other names that we just mentioned.