Applied Materials May Be OversoldApplied Materials has struggled since the summer, but some traders may think the chip-equipment stock has rebound potential.
The first pattern on today’s chart is the sharp drop on October 15 after industry peer ASML issued weak guidance. AMAT kept sliding for more than a week before trying to stabilize and make a higher monthly low relative to August and September. That could mean buyers were active.
Next, prices are still near the bottom of the range. Does that provide opportunities for favorable entries?
Third, the bounces are occurring slightly above AMAT’s previous record from 2022. That may suggest new support has been established above old resistance.
The rising 200-day simple moving average may further reflect a longer-term uptrend.
Finally, stochastics are rebounding from an oversold condition.
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