AMAT finds buyers around 56.39 for the third day in a row
Applied Materials Inc. (AMAT) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
AMAT finished Wednesday at 56.47 losing $0.73 (-1.28%), but still slightly outperforming the Nasdaq 100 (-1.67%). Trading $0.71 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 56.48, the stock confirmed its breakout through the previous session low after trading up to $0.09 below it intraday.
Daily Candlestick Chart (AMAT as at Sep 16, 2020):
Wednesday's trading range has been $1.81 (3.15%), that's slightly above the last trading month's daily average range of $1.74. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AMAT.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After spiking up to 58.20 during the day, the market found resistance at the 200-day moving average at 57.89. The last time this happened on April 17th, AMAT lost -4.83% on the following trading day. Applied Materials found buyers again today around 56.39 for the third trading day in a row after having found demand at 56.48 in the prior session and at 56.12 two days ago.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling might speed up should prices move below the nearby swing low at 54.68 where further sell stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 200" stand out. Its common bearish interpretation has been confirmed for Applied Materials. Out of 4 times, AMAT closed lower 75.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 75.00% with an average market move of -2.94%.