"HIGH-CONVICTION SHORT SETUP on MU - this is a textbook overbought reversal play in a bull market. Daily RSI screaming at 78.8 (massively overbought), price sitting at $399.65 just 3.1% below resistance at $412.43 but a whopping 22.5% above support at $326.19. Volume profile confirms we're in a LOW VOLUME NODE at $398.12 (only 17.1% relative volume) - price has zero business staying up here. Point of Control sits way down at $340.90, and value area high is $379.05, meaning current price is trading 5.4% ABOVE fair value. The 1-hour chart shows RSI falling from 64.09 with bearish SMA cross (SMA20 < SMA50). MU just reported Q1 FY2026 earnings - typical post-earnings volatility creates prime mean-reversion setups. My portfolio is balanced 50/50 long/short, so this short adds diversification. AGGRESSIVE TARGET at $365 (value area reversion) with tight stop at resistance $412.43 gives us a stellar 2.71:1 R/R ratio. Yes, I'm 0-1 on MU historically, but that loss was different conditions - this overbought extreme with low volume support is a GIFT. Market regime is bull, but extreme RSI overrides regime context. Strong conviction - let's fade this rip and collect when gravity kicks in.
--- Trade Exited ---
Reason: THESIS INVALIDATED - Price rallied +2.65% to $410.24 instead of mean-reverting. Daily RSI remains elevated at 76.67 but price action shows NO rejection at resistance. Pattern shifted from 'strong bearish' expectation to 'resistance test' - and critically, MU is TESTING resistance without breaking down. Price is now just -1.5% below resistance at $416.45, dangerously close to breakout. The expected mean reversion to value area ($365) has completely failed to materialize over 3 days.. MAJOR CON..."