Thursday, October 1, 2026
Hey traders!
Micron reported last night, and the first thing I care about is not the headline beat. It is whether the chart patterns I laid out on Tuesday survived the news. They did. In Tomorrow Night’s Micron Report is Going to Travel Farther than the Stock Itself, the plan was the weekly squeeze in SMH, the memory follow-through in DRAM, and the longer weekly targets on MU. The report was solid, the stock digested it, and that plan is intact. As we head into October earnings, I am also eyeing photonics and software, where the charts are already setting up with pre-earnings momentum.
Micron Earnings: The Numbers
Micron sold $54.2 billion of memory last quarter. A year ago, that number was $11.3 billion. Wall Street was already looking for about $51 billion, so this was a beat on a high bar, not a shock. They earned $33.42 a share, a bit above the roughly $32 the Street wanted. Margins hit 87%. A year ago, they were about 46%.
Next quarter, they guided to about $61.5 billion in sales, versus roughly $57 billion expected, and $38.15 a share. The only soft line was the margin guide, about 86% next quarter. Management called that the low point for the year and said margins should climb from there.
The line that keeps the fundamental story lined up with the charts: more than 75% of next year’s chips are already sold, and customer talks have already moved to 2028. They still say supply gets tighter in 2027 and 2028, not looser. That is a solid report. It did not need to be a perfect one.
The Technical Pattern: Micron
MU closed Wednesday at $1,065. After the bell, it chopped around that level, dipped Thursday morning toward $1,020, and buyers stepped in. By the afternoon, it was back in the green, in the $1,080s.That is what I want to see after a major report on a stock that has already had a huge run. A gap is nice. A hold is enough. The weekly uptrend is intact. The dip was bought. Price did not lose the structure I was using.
On Tuesday, I said a move inside the expected range, even a dip toward $1,000, was not a failure, and that I would only get concerned if MU was down $150 or more after the open. We did not get that. Buyers defended the pullback, and the longer-term targets from that note, $1,144, $1,396, and $1,575 — remain on the map.
SMH and DRAM: Trading the Weekly Trend
Relative strength is the other piece. Semiconductors and memory did the heavy lifting on the way up, and a good report that the tape digests does not take that leadership away. It gives the group a reason to keep working into October.
SMH is still my North Star for the sector. In Tuesday’s note, I laid out the weekly coil after the run into the $672 area, the rising averages still underneath price, and the squeeze I want to see fire long. That setup is unchanged. The 127.2% extension sits near $716, the 161.8% near $773, and $800 is still the working target if memory leadership stays with us. Nothing in last night’s report damaged that. A solid Micron print is the kind of backdrop that lets a weekly Squeze resolve higher rather than fail.
DRAM is my way of trading and investing in the memory space at a much lower price point while also gaining exposure to the top tickers in this basket. Micron is the largest piece of it, with Samsung and SK hynix right behind, which is why I said on Tuesday that a Micron reaction does not stay inside MU. Overseas, Samsung and SK Hynix already rallied hard on the same report. I am eyeing DRAM to remain the relative strength leader post-Micron. I am continuing to hold and trade both SMH and DRAM higher as long as the averages hold.
Photonics and software into earnings
As October begins, we see many, many companies enter the Earnings Hot Zone. And this season, I am not only watching chips. Photonics is already acting like a leadership group. Lumentum, Coherent, and Ciena ripped today, and the group is demonstrating relative strength. I also like AXTI. The price action we are seeing is the beginning of pre-earnings momentum.
Bullish patterns, relative strength, and a reporting window in front of them are the same combination I like in SMH. The optical names are the plumbing of the AI buildout, and the charts are telling you money is already rotating there. Software is the other group on my list. It spent a long stretch as the forgotten side of tech, but it has been recovering off the spring low. Not only has it continued to recover, but we have also seen many names experience explosive post-earnings moves over the last two quarters, driving pre-earnings momentum.
I am not chasing every software name. I want the ones already holding higher lows, showing a squeeze or a break back above the 50 SMA, and building momentum before the report. That is the Hot Zone bid, not a hope that the quarter saves a broken chart.
Bottom line
The plan from Tuesday’s Micron note remains unchanged. The report was solid, the chart held, and relative strength in semiconductors and memory is still the theme. I am staying with SMH for the weekly squeeze toward $800, and with DRAM for the memory follow-through. I am not chasing the first pop. I want dips that hold the averages.
Into October, I am adding photonics and software to the watchlist, for the same reason I wanted MU before this report: bullish chart patterns and pre-earnings momentum. The print did not hand us a gap. It also did not break the patterns. That is enough to keep trading the upside.
Trade smart, stay disciplined,
VP of Options, Simpler Trading
@traderDanielle
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The information in this newsletter is for educational purposes and does not constitute investment advice. Trading involves substantial risk of loss.
