Chart of the Day: Applied Materials Follows the Rest of Semi Stocks
The materials/equipment company has layed out big plans but is yet to be rewarded.
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With competitor ASML Holding (ASML) posting strong earnings and guidance one would have expected shares of Applied Materials (AMAT) to jump ahead. But that did not happen, as the rest of tech and especially semiconductor stocks are in the midst of a massive corrective phase.
Nothing has been untouched from the selling, and though Applied’s management is confident about its future and has recently told the world about it, there is nothing to stop the ball from rolling down hill once it gets going.
Of course, the sellers will eventually finish up and what will be left to pick from are the best and brightest names, like Applied, that suddenly became cheap. That time may not be now, but certainly soon on the horizon.
Eventually the positive news will matter. Once Applied starts moving again, new highs could be seen in a matter of months ($600+).
For now, we look at the chart and see a stock that is right near good support, the $400 level. Multiple times over the past several months this level has held and the stock has launched off that spot.
The MACD has rolled over, so has momentum (stochastics), but money flow remains robust (bottom pane). Candles are amble color, which is neutral on the GoNoGo composite of indicators. High volume selling the last couple of sessions may signal exhaustion.
We like Applied Materials in TheStreet Pro Portfolio and rate it a One, or “buy at anytime.”
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At the time of publication, Pro Portfolio was long AMAT.
