NEW YORK (
) -- Applied Material earnings are on tap and it comes at a time where the semiconductor sector is reeling. I thought I would take a quick look to see if it might be playable in front of earnings and if not, then afterwards.
When I look at the daily chart, Applied Materials was able to fill the gap Tuesday which is somewhat bullish as seen below.
The problem with this stock as with so many others is that to fill one resistance zone just leaves a series of others up above. I can count three more, the first of which is just another fifty cents higher.
The good news is that Applied Materials to have the $12.40 to $12.50 zone as a target eventually but the risk of buying now is the lows, so it's hard to see how one could make the trade work -- especially in front of an earnings report.
So if we think about it longer term, "What might the possibilities be?" Well, the trends are not in a buyer's favor. Here's are weekly and monthly charts.
Although the monthly chart is sideways, the weekly is quite bearish and the support bar to the far left in that chart was just hit with even greater volume. That probably means the stock does work higher congruent with the daily chart but this is a stock you want to look to exit in the coming weeks -- not accumulate.
Thanks for lending me your ears and eyes and until next time, just keep trading the charts.
At the time of publication, Little has no positions on the equity mentioned.
L.A. Little, author, professional trader and money manager, writes daily on www.tatoday.com, a free educational site for traders and investors. He has been featured in numerous publications and is the author of
. His new book,
, details the principles and techniques he writes about on TheStreet. Little�s background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, Little espouses a simple technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and trend qualification, he provides a breath of fresh air to an otherwise crowded room of derivative indicators with an emphasis on technical minutiae.