DailyPlay – Opening Trade (MU) & Closing Trade (CHWY) – June 12, 2025

Closing Trade

• CHWY – 128% gain: Sell to Close 12 Contracts (or 100% of your Contracts) June 27 $46/$41 Put Vertical Spreads @ $3.74 Credit. DailyPlay Portfolio:  By Closing 12 Contracts, we will be collecting $4,488. We initially opened these 12 contracts on June 10 @ $1.64 Debit. Our gain, therefore, is $2,520.

MU Bullish Opening Trade Signal

Investment Rationale

Investment Thesis
Micron Technology (MU) offers a compelling bullish setup ahead of its June 25th earnings report. The stock has recently staged a strong breakout and is gaining momentum on both technical and fundamental fronts, setting the stage for continued upside into and potentially through the earnings event. With a growing AI-driven demand cycle, improving DRAM/NAND pricing trends, and an exceptionally strong valuation profile relative to peers, MU is positioned as a leading beneficiary in the semiconductor upcycle. The upcoming report serves as a catalyst that could drive a re-rating in the stock, particularly given Micron’s historically strong post-earnings moves during upcycles.

Technical Analysis:
MU recently broke above a multi-month consolidation range, with price clearing the $100 resistance level on expanding volume and strong relative strength. The 50-day and 200-day moving averages have both turned upward, confirming a bullish trend reversal, and the stock is now trading comfortably above all major moving averages. RSI remains in bullish territory but not yet overbought, suggesting further upside potential without immediate exhaustion. If MU can hold above the $110–$112 area into earnings, the next technical target aligns with the $130 range based on the measured move from its prior base.

Fundamental Analysis:
Micron appears significantly undervalued relative to the semiconductor sector, despite leading on nearly every forward-looking metric. The company is well positioned to capitalize on AI memory demand and a recovery in memory pricing, both of which are accelerating. Its upcoming earnings report is expected to confirm this operational momentum, validating current expectations for explosive earnings growth in the coming quarters.

• Forward PE Ratio: 9.90x vs. Industry Median 22.84x
• Expected EPS Growth: 99.18% vs. Industry Median 16.50%
• Expected Revenue Growth: 22.63% vs. Industry Median 10.46%
• Net Margins: 14.92% vs. Industry Median 10.43%

Options Trade:
To express a bullish view on MU with controlled risk into earnings, consider the July 11, 117/130 bull call vertical for a net debit. This spread’s long call sits just above current levels, offering a modest buffer while capturing potential upside if the stock rallies post-earnings. By using a vertical spread, the strategy helps neutralize the effects of an implied volatility crush after the report, delivers a favorable risk/reward ratio of over 2:1, and reduces premium outlay compared to buying calls outright, allowing you to participate in upside momentum while limiting your maximum loss to the net debit paid.

MU – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 5 MU Jul 11 117/130 Call Verticals @ $3.90 Debit per Contract.

Total Risk: This trade has a max risk of $1,950 (5 Contracts x $390) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $390 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 123

Stop Loss: @ $1.95 (50% loss of premium)

View MU Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View MU Trade