A semi ‘+’ update (pun completely unintended) on Applied Materials being sent to all subscribers (as opposed to email opt-ins) due to our macro theme developing in the Semi Equipment sector.
With the disclaimer that this is a noisy week and I do not trust the broad market’s short-term price signals, I want to stick 100% with the technicals on the Semi Equipment sector to go with the current bullish (fundamental) forward view. As such, here is AMAT, a headline equipment company which, you may recall, issued a stellar quarterly release several weeks ago that we combined with early Book-to-Bill signals to begin developing our view.
AMAT 60 min. is popping above the short-term downtrend channel and 50 period EMA that has been acting as resistance. MACD is still red but with a positive divergence and RSI is popping to green (50+).
AMAT daily shows the price trying to pop from the EMA 20, which is a moving average that often acts as very short-term support. The first strong support comes into play at the 21-22 range (lateral cluster and 50 day moving averages). I show this because this is BREXIT hysteria week and well, anything can happen.
AMAT weekly shows resistance upcoming. But this resistance could actually be the rim of a large Cup & Handle. If that is the case, perhaps it will break through, then make a handle consolidation. That is just speculation. For now, the support around 21 is shown along with a major support area at 19. Given the fundamental picture, I am not going to hold my breath on that one. But it is worth keeping note of in the event that markets have another bear tremor up their sleeve before Q2 reporting season begins in July.
I am not going to plot buy, sell and stop loss targets on this one. It is more a macro update. AMAT could be ending the June consolidation now, but again, it is a dynamic week in the markets, so I am not taking anything for granted this week.
We will have more views of this sector and other relevant ones as we get clear of the market disturbing news of this week.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.