History Says Don't Sweat AMAT's Latest Pullback

Applied Materials stock has flourished over the last nine months

Deputy Editor
May 6, 2021 at 12:14 PM
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To say it's been an interesting nine months for Applied Materials, Inc. (NASDAQ:AMAT) would be an understatement. Despite a global chip shortage, the semiconductor name has managed to tack on 102% over that time, eventually logging an April 5 record peak of $146. In 2021 alone, Applied Materials stock has added nearly 50%, and though the security was last seen down 0.4% to trade at $129.80 with three days' worth of pressure from the 30-day moving average, this most recent dip has AMAT trading near a trendline with historically bullish implications. 

AMAT Chart May 6

Specifically, the equity just came within one standard deviation of its 40-day moving average, after spending some time above this important trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, 12 similar signals have occurred in the past three years. The security enjoyed a positive return one month later in 75% of those cases, averaging a 4.6% gain. From its current perch, a move of similar magnitude would put AMAT at $135.77 -- putting it back on track to reclaim its aforementioned highs. 

What's more, the equity's Schaeffer's Volatility Scorecard (SVS) sits at 84 out of a possible 100. This means Applied Materials stock has managed to exceed volatility expectations during the past year -- a boon for option buyers. 

 

 

 

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