NASDAQ:AMAT may be ready to breakout.

A possible breakout setup was detected on APPLIED MATERIALS INC (NASDAQ:AMAT) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NASDAQ:AMAT.

What is the technical picture of NASDAQ:AMAT telling us.

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Taking everything into account, AMAT scores 7 out of 10 in our technical rating. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, AMAT is only an average performer.

• The long term trend is positive and the short term trend is neutral. The long term trend gets the benefit of the doubt for now.
• AMAT is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so AMAT slightly outperforms the market at the moment.
• In the last month AMAT has a been trading in the 111.92 - 125.62 range, which is quite wide. It is currently trading near the high of this range.
• Prices have been consolidating recently, this may present a good entry opportunity.
• Looking at the yearly performance, AMAT did better than 88% of all other stocks. However, this overall good ranking is mostly due to the recent strong move.
• AMAT is part of the Semiconductors & Semiconductor Equipment industry. There are 105 other stocks in this industry, AMAT did better than 59% of them.

How do we evaluate the setup for NASDAQ:AMAT?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:AMAT scores a 8 out of 10:

AMAT has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 122.6. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 116.7, a Stop Loss order could be placed below this zone.

Trading breakout setups.

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the zone.

Of course, there are many ways to trade or not trade NASDAQ:AMAT and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.