Good technical signals and a possible breakout for Applied Materials.

Applied Materials (NASDAQ:AMAT) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:AMAT.

Technical Analysis Observations

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 9 out of 10 to AMAT. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, AMAT is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• Looking at the yearly performance, AMAT did better than 93% of all other stocks. On top of that, AMAT also shows a nice and consistent pattern of rising prices.
• AMAT is part of the Semiconductors & Semiconductor Equipment industry. There are 105 other stocks in this industry. AMAT outperforms 80% of them.
• AMAT is currently trading near its 52 week high, which is a good sign. The S&P500 Index however is also trading near new highs, which makes the performance in line with the market.
• In the last month AMAT has a been trading in the 125.25 - 141.80 range, which is quite wide. It is currently trading near the high of this range.

How do we evaluate the setup for NASDAQ:AMAT?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:AMAT currently has a 8 as setup rating:

AMAT has an excellent technical rating, but the quality of the setup is only medium at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

How can NASDAQ:AMAT be traded?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

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