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AMAT Setting Up Quite Well

Semiconductor equipment manufacturer Applied Materials ($AMAT) looks to be setting up quite well in a very constructive basing pattern. The semiconductor sector has been showing signs of strength over the last month, and I opened a position in AMAT in late May. NVDA and other stocks in this space have been benefiting from the shortage of semiconductor chips, and I believe Applied Materials may be next to begin a strong uptrend. With fantastic quarterly earnings growth of 83% and an increase in sales by 41%, AMAT has the potential to become a large, liquid leader that everyone wants to own. Remember, it is funds and institutions that control the market. They cannot buy penny stocks or illiquid names. They prefer to own companies like AMAT that have huge market caps (in this case over $127 Billion). In addition, Applied Materials sports a very healthy 41% return on equity, indicating their efficiency at generating profits.

AMAT is also shaping up really well on a technical basis. I particularly like the hammer bar on the weekly chart off the lows around $114, as this may be a sign of institutional support. After retaking its'10-week line, AMAT has consolidated calmly on low volume, which is something I always like to see. I currently own a full position in AMAT and will continue to hold until the market tells me it is time to exit. Patience pays.

To learn more about swing trading and trading in general, visit my course page. To get two free stocks valued at up to $1,500, click this link to join Webull. Full Disclosure: I currently own AMAT. Full Disclosure: This post contains an affiliate link to Webull. Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this post constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog or the associated Twitter and Instagram feeds. The stock or stocks presented are not to be considered a recommendation to buy any stock or stocks. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.


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