Micron's stock could drop another 15% on make-or-break earnings report: Analyst

Micron's stock is at a critical juncture.

While it has recovered by nearly 30 percent since the chipmaker reported a disappointing quarter in December, experts say Micron's fate hinges on its after-the-bell earnings report Wednesday.

"If we look at the history of Micron ... from the 2009 low, we have three distinct declines, each one roughly 70 percent," Todd Gordon, founder of TradingAnalysis.com, told CNBC's "Trading Nation" ahead of the report.

"Thus far, we've only done about a 55 percent decline, so if history is any guide, perhaps we have another 15 percent to go on the downside," Gordon said of Micron's most recent dip. "I'm wondering, if the numbers are weak tonight, could we go down and test that weekly level?"

Gordon said that effect seemed "very" possible going into the report, noting how close Micron's stock currently is to hitting that weekly trend line.

If Micron's quarterly results disappoint again, they could send the chipmaker's stock "down into the $40 range or even lower," he said. "So, if there's weakness, I'll be looking to short Micron in a very confusing semiconductor space."

Michael Bapis, managing director of Vios Advisors at Rockefeller Capital Management, said he was also "super focused" on Micron's earnings, but maintained a constructive view on the company's longer-term prospects.

"We are in a technological revolution that's going to continue, so someone in that space is going to get it right," Bapis said in the same "Trading Nation" interview.

"If [the report is] even close to being OK and people shake off the bad news from last December, I think you can go long the stock," he said. "It's trading closer to its 52-week low than the high, and … there's still demand in the space. It's just a matter of managing the company right, and this earnings release tonight will really help us understand where they're going."

Micron's stock hovered around the $40 level for most of Wednesday's trading session and closed down less than 1 percent at $40.13. Shares of the $45 billion company are up more than 26 percent year to date.

Disclosure: Vios Advisors at Rockefeller Capital Management owns shares of Micron.


Trades to Watch

Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more