MU and LRCX: Cup and handles point higher

Our latest The Sector Edge report (12/29) highlighted a potential tactical bullish cup-and-handle pattern for the VanEck Semiconductor ETF (SMH).

Both Micron Technology (MU) and Lam Research (LRCX) have already confirmed this theme with breakouts from their own November–December cup-and-handle formations.

In terms of Micron Technology (MU), holding above the 266–260 support zone—defined by the 61.8% extension of the rally from the cup low to the handle high projected from the handle low, the cup-and-handle neckline, and the rising 13-day moving average—would keep the breakout intact and preserve the bullish structure. The pattern initially projected upside to 293.85 (100% extension), which MU has already achieved, and suggests further gains toward 337.00–338.45 based on the full cup-and-handle count and the 161.8% extension.

Chart 1: Micron Technology (MU): Daily chart with moving averages

For Lam Research (LRCX), holding the 174.72 to 167.00 support zone, which is defined by the 61.8% extension of the rally from the cup low to the handle high projected from the handle low, the cup-and-handle neckline, and the rising 13-day moving average, would keep the breakout intact and maintain this bullish setup. The cup and handle breakout projects upside to 187.79 (100% extension) initially and then toward the 204.00-208.91 range (the full cup-and-handle count and the 161.8% extension).

Chart 2: Lam Research (LRCX): Daily chart with moving averages