Is Applied Materials Waiting for a Break Out?

Published on Tuesday, 26 June 2012 06:32 Written by TradersHuddle Wire

New York, June 26th (TradersHuddle.com) - Applied Materials, Inc. (NASDAQ:AMAT) ended the trading session at $10.94, near its 50 day moving average set at $11.06. Applied Materials' price action placed the stock below this important level, which makes it difficult to be bought, as the stock will certainly face resistance as it approaches its 50 day moving average.

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.

The latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $9.97 and resistance at $11.70. These levels will be closely monitored, as they provide great insight into the latest price dynamics.

If traders want to establish a position in Applied Materials, given the resistance expected as the stock approaches its 50 day moving average, a trade might materialize as the stock manages to break this important technical level. After the breakout, the 50 day moving average could be used as support going forward. However, until the break materializes, buying the stock is basically a gamble with 50-50 chance.