Applied Materials in charts: U.S. sales register 100% Y/Y rise while revenues from Europe soar over 200%
Earnings-related news was announced, reporting a 100% increase in US sales and a surge of more than 200% in European regional sales.
While the current price is positioned above the support level, the 20-day moving average remains misaligned, indicating weak upward momentum. I will therefore consider a cautious entry while monitoring the defensive strength near the support level.
I will ride the rebound above the support level, taking profits when the resistance level of $591.09 is reached, and cutting losses if the support level of $436.33 breaks down.
The RSI(14) stands at 47.6, within the neutral range, while the moving averages are in a misaligned arrangement. Trading volume is at 1.01x the 20-day average, and the stock recorded a +5.8% change over the past 7 days.
A +5.5% reaction pattern was identified in this stock's prior event history, and while the VEEE, LRCX, and AMD cases lack direct evidence of similarity, they are worth reviewing together as references for top-tier global performance.
Based on the positive catalyst of surging sales in the US and Europe, I set a +2.0% expectation, anticipating a rebound above the support level. In reality, however, the 20-day moving average was misaligned and upward momentum was weak, which proved to be the decisive factor, resulting in a -17.3% loss and a FAILED verdict. At the time, the figures of RSI(14) at 47.6 and trading volume at 1.01x the 20-day average already suggested that momentum was not sufficiently strong, but having focused too heavily on the positive news, I failed to adequately account for the possibility of a weakening trend, which is regrettable.
Through this trade, I learned that even when there is positive news, entry should be approached more conservatively when upward momentum is lacking, such as when the moving averages are not properly aligned. Going forward, I will more strictly verify the proper alignment of technical indicators and whether moves are accompanied by trading volume, and I will reflect in my next trade an action plan that thoroughly adheres to the stop-loss principle when support levels are broken.