Micron Technology, Inc. (NYSE:MU) is giving back some of its recent gains in early Thursday trading. The shares broke resistance on Wednesday.

They have also been in a strong upward trend. These can both be bullish dynamics that could suggest a further move higher. This is why Micron Technology is the Stock of the Day.

Markets are generally viewed in terms of three trends. Long, intermediate, and short-term. If all three of these trends are moving in the same direction, it shows exceptional strength.

For example, if a stock goes from $10 to $100 in a year, and then drops back to $90, it is still in a long-term uptrend, but it is also in a short-term downtrend.

One way that traders analyze trends is with the use of moving average prices. If short-term, intermediate-term, and long-term moving average prices are all headed in the same direction, it shows strength.

As you can see on the chart, there are three moving averages. They are the 20-day, the 50-day, and the 150-day moving average prices. They are all moving higher.

This shows strength in all three trends. This indicated that the resistance around $463.50 would break.

Breaking resistance can also be a bullish dynamic. It shows that the investors and traders who created the resistance with their sell orders are gone. They have either finished or canceled their orders.

In other words, a breakout is a graphical illustration of supply leaving the market. Markets are driven by supply and demand. If supply is taken off the market, it sets the stage for it to move higher.

New buyers who enter the market will have no choice but to outbid each other to draw sellers back in. This could force Micron into a new uptrend. It may continue to rally.

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