Bear Put Spread – MU
📉 Momentum exhaustion after an extreme multi-week run. Opened February 02.
Today I opened a Bear Put Debit Spread in Micron Technology (MU), targeting a short-term pullback after an unusually extended upside move.
On the weekly chart, MU has printed seven consecutive bullish candles, with the current week shaping up to be the eighth. This kind of persistence is rare and often precedes at least a tactical reset. Overbought conditions are now visible across all timeframes — daily, weekly, and monthly.
RSI is elevated (74 on the daily), momentum is stretched, and last Friday’s session produced a clear bearish candle, which I view as an early warning rather than a full reversal signal.
Trade structure
Expiration: March 20, 2026
Contracts: 4
Buy PUT 450
Sell PUT 440
Entry was taken with spot around $438.
Risk is fully defined via a debit spread structure.
👉 View on OptionStrat
👉 Trade Journal
Trade thesis
I am not expecting a breakdown or trend failure. This is a mean-reversion play.
My base case is a pullback toward the EMA12 area, roughly around $395, where I plan to exit the position early and lock in $500+ in profit — well ahead of expiration.
The goal here is to capitalize on momentum exhaustion, not to fight the longer-term trend.
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.
The setup is clean - seven straight bullish weeks with RSI at 74 is textbook mean-reversion territory. The $395 target near EMA12 makes sense for early exit, though I'd be watching volume on any move down. If MU retraces on light volume, this could bounce faster than March expiry allows. The spread structure caps risk nicely but also limits upside if the pullback is steeper than expected. Solid trade thesis overall, just keepsn eye on semiconductor sector rotation if that starte to shift.