The Alpha Algorithm Chooses a Tech Play with Momentum

Technology has been one of the hottest areas in the U.S. stock market so far in 2017.

This week’s Alpha Algorithm recommendation revisits a previous recommendation from that universe of tech stocks. Back in early June, it netted you a 10.10% gain on the stock in just a two-week period.

Founded in 1978 and headquartered in Boise, Idaho, Micron Technology, Inc. (MU) is one of the leading worldwide providers of semiconductor memory solutions. The company’s memory solutions serve customers in computer and computer-peripheral manufacturing, consumer electronics, CAD/CAM, telecommunications, office automation, network and data processing and graphics display.

Micron Technology Inc. (MU) versus the S&P 500 year to date.

Eight Top Investment Strategies Betting on Micron Technology Inc. (MU)

1. Exponential Technologies

The stock is part of a strategy that invests in nine different fields deemed to be vast growth “exponential” technologies: big data and analytics, nanotechnology, medicine, networks, energy and environmental systems, robotics, 3-D printing, bioinformatics and financial services.

2. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

3. Goldman Sachs Hedge Fund Index

The stock is part of the Goldman Sachs Hedge Industry Index, which tracks an equal-weighted index of the 50 most frequently held U.S. companies selected from the portfolios of hedge funds.

4. Billionaire Bet

The stock is one of 30 U.S. companies tracked in an equal-weighted index selected from the portfolios of 10 asset managers with a personal net worth of at least $1 billion.

5. Insider Sentiment

It is one of 100 equally weighted U.S.-listed large- and mid-cap stocks chosen based on trading in company stock by corporate insiders, price momentum and trailing 12-month volatility. Specifically, this strategy looks at the increase in insider holding.

6. Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

7. Large-Cap Alpha Core

The stock is one of a tiered equal-weighted index of large-cap stocks selected from the S&P 500 and is expected to outperform the broader large-cap space based on an intricate methodology of ranking stocks according to their recent performance.

8. Value Line 100

It is one of the top 100 stocks in the universe of 1,700 stocks for which Value Line gives a #1 ranking in the Value Line Timeliness Ranking System, based on expected price performance over the following six to 12 months.

Recommendation

Buy Micron Technology Inc. (MU) at market today. Place your initial stop at $31.50.

Options

If you want to play the options, I recommend the MU January $35 calls (MU180119C00035000), which last traded at $4.05 and expire on Jan. 19.

Portfolio Update

Sell one half of you BA November $235 calls, which last traded at $22.53, for a gain of 98.5%.

You were stopped out of Comcast (CMCSA) on Sept. 15 at $36.50 for an 8.59% loss.

Sincerely,

Nicholas A. Vardy