Trading Idea - Is Applied Materials close to Resistance?

Published on Wednesday, 18 January 2012 08:12 Written by Christopher Lynn

New York, January 18th (TradersHuddle.com) - Shares of Applied Materials, Inc. (NASDAQ:AMAT) are trading very close to calculated resistance at $11.88 with the current price action closing at just $11.78 placing the stock near levels that make it difficult to buy.

Applied Materials, Inc. (NASDAQ:AMAT) provides nanomanufacturing technology solutions for the semiconductor, flat panel display, solar, and related industries worldwide. The company provides a range of manufacturing equipment used to fabricate semiconductor chips or integrated circuits. Applied Materials' customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar cells, and other electronic devices manufacturers.

Applied Materials' current stock range is defined by current calculated support defined at $10.12 and by the resistance level at $11.88, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Applied Materials, as the stock is well above support, however, as the stock pulls back towards $10.12 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $11.88 then traders will get an opportunity to enter Applied Materials stock by establishing a position as the stock moves to a higher range.