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Applied Materials, Inc. (AMAT) - Poised For A Trend Reversal?

05/25/00 01:42:32 PM
by Jayanthi Gopalakrishnan

Applied Materials, Inc. [AMAT] has started showing signs of strength. Is it a buy?

Security:   AMAT
Position:   N/A

The chart of AMAT, with the 10-day moving average and a short-term trendline, indicates that the stock may be a strong buy candidate. As of May 25, 2000, the price has approached the 10-day moving average and looks like it may face resistance at that point. However, if prices break above this moving average the critical point would be the short-term trendline- the point of confirmation.

If prices break above the trendline with heavy volume I would implement the following trading strategy:

Enter long position at $87.00
Exit long position at $91.00
Place a trailing stop loss 1/4 point below price.

Applied Materials, Inc. [AMAT] is beginning to show signs of a possible trend reversal.
Graphic provided by: CyBerCorp, Inc..
 
If, however, prices met resistance at this trendline and showed signs of reversing I would consider entering a short position. My trading strategy would be:

Enter short position at $85.50
Exit short position at $82.50
Place a trailing stop-loss 1/4 point above price.



Jayanthi Gopalakrishnan


Title: Editor
Company: Technical Analysis of Stocks & Commodities
Address: 4757 California Ave SW
Seattle, WA 98116
Website: Traders.com
E-mail address: Jayanthi@traders.com

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