Can it surprise further?

I talked about this company less than a year ago, expecting it could double within a year. It has done a great job since then, very close to the target of doubling. I’m talking about Micron Tech (MU), a chip company that is flying at the moment. I have no concerns for its long term prospects and indeed holding long for it. But the question is its immediate future in facing the upcoming earnings report tomorrow. As you know by now, I’m a long term investor for quality dividend stocks but also an active short term trader for speculation. I think MU may be heading into a headwind instead of a tailwind. You see, regardless how great a company is, it must face its reality by going in line with its fundamentals within certain wigging room. For Street darlings, they often go ahead of themselves from time to time but if this is too much ahead of itself, then the risk of a shock could be immense. I think MU is probably at this moment. It is a great chip company but is too hot by going up too fast too soon, sort of speaking. At this level around $60, the expectation is super high and its stock has priced in not only a perfect earning but may be super strong earnings moving forward. If there is slightest miss to the unbelievably high expectation, just watch the underneath. The rug will be pulled out suddenly and all the guys chasing high will be relentlessly punished. If you look at its chart, it is too far away from its 50 DMA. If any trading logic still holds true, it should return to means at some point and the earnings report may be the time point for it to do so.  

I’m willingly to bet that MU will miss the expectation and it will crash down towards low $50s following the earnings. As always, I could be wrong and MU can further surprise everyone with another great earnings beyond the current already super high expectations. If so, it can moon shoot again. For this reason, I will be trading with put options without risking myself too much but if I’m right, it could be a 5-10 times return potentially. Let’s watch the fire work tomorrow!