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AMAT Swing Trade Setup & Entry

AMAT (Applied Materials Inc) offers an objective short entry following the recent breakdown & backtest of this steep bearish rising wedge pattern & will be added as an Active Trade at current levels (29.43) with an ideal entry range between 30.27 - 28.70. The price targets are T1 at 27.81 & T2 at 26.04 with additional targets likely to be added, depending on how the charts play out going forward. The suggested stop is any move above 30.56 and the Suggested Beta-Adjustment for this trade is 0.9.

AMAT daily Sept 14th

AMAT daily Sept 14th

Props to @gaucho & @sau987 for inquiring about AMAT in the trading room. I had briefly mentioned AMAT the recent KLAC trade, along with the fact that I'm seeing quite a few bearish charts setting up in the semiconductor equipment stocks (which includes AMAT & KLAC). The reason that I'm posting a short entry on AMAT today, despite the fact that I stated that I didn't plan to initiate or add to any positions today, is because I am already short AMAT & believe the stock offers an objective entry at this time. I had pointed out in the trading room recently the fact that AMAT was backtesting the wedge & that it was offering another objective entry but didn't realize until now that I hadn't already posted the setup & entry.

Of course, the comments that I posted earlier today still hold true: The chances of the market gapping up or down tomorrow are elevated due to the flurry of economic releases before the market opens. As such, one must decide whether to take a fractional or full short position (assuming they like the setup) or hold off until tomorrow or possible after the FOMC announcement next week. I'm a firm believer that more often than not, the news or any future surprises are already priced into the charts & I wouldn't add this setup if I didn't think that the R/R wasn't clearly skewed to the downside, despite any knee-jerk reactions the market might experience over the next week or so.

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Sep 14, 2016 1:58pm|Categories: Completed Trades - Short|Tags: |2 Comments

2 Comments

  1. jameske September 14, 2016 2:21 pm at 2:21 pm

    I have had a go at this one. Wonder if this curses it?

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    • rsotc September 16, 2016 1:06 pm at 1:06 pm

      jameske… lol. AMAT making a run up towards the stop but with the breaks finally coming on for the 800-lb gorilla (AAPL), we just might avoid a stop-run on AMAT. Still backtesting the wedge today while SMH just failed on an attempt at new highs & so far is forming a fairly nasty candle. Where SMH goes will likely determine where AMAT goes.

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