AMAT breaks back above 20-day moving average
Applied Materials Inc. (AMAT) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, AMAT finished the week 4.66% higher at 42.70 after gaining $1.04 (2.5%) today on high volume, notably outperforming the Nasdaq 100 (-1.01%) following Thursday's earnings report. Trading $1.01 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, AMAT actually gained 2.35% on the following trading day.
Daily Candlestick Chart (AMAT as at May 17, 2019):
AMAT reported earnings of $0.7 per share after Thursday's market close. With analysts having expected an EPS of $0.67, Applied Materials Inc. topped market expectations by 4.5%. The company's last earnings report was released on Feb. 14, 2019, when Applied Materials Inc. reported earnings of $0.81 per share surpassing market expectations by 1.3%.
Friday's trading range has been $1.80 (4.15%), that's far above the last trading month's daily average range of $1.18. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AMAT.
The market managed to close back above the 20-day moving average at 42.70 for the first time since May 3rd. Prices are trading close to the key technical resistance level at 43.27 (R1).
While Applied Materials is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to May's high at 44.67, upside momentum might accelerate should the share mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Applied Materials. Out of 21 times, AMAT closed higher 66.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 76.19% with an average market move of 3.26%.