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AMAT Setting Up Well With Earnings Approaching

Semiconductor stock Applied Materials (AMAT) is setting up well for a potentially strong move higher. The semiconductor space has been a focus of mine over the past few months due to the semiconductor chip shortage. I took positions in NVDA and AMAT in late May. My Nvidia position is currently my strongest holding while I was stopped out of AMAT after buying it. While it can be frustrating to be knocked out of a stock, it is just part of trading. The key is to not tune a stock out completely and to watch to see if another entry point presents itself. This looks to be the case with Applied Materials. After shaking out below the 50-day moving average in July, AMAT has really been tightening up over the last week. Compressed action like this on the right side of a base is extremely constructive. I took a position in AMAT around $144 on Monday. It is important to note that Applied Materials is set to release earnings in two weeks. Earnings season always adds added volatility so risk management as usual is an essential aspect of profitable trading.

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Full Disclosure: I currently own AMAT.


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