Looming Bearish Reversal for Applied Material (AMAT)?

Applied Material (AMAT) is one of the stocks we analyzed during Monday's live Daily Market Commentary webinar. After dropping in the aftermath of the company's earnings announcement on May 17, after market close, AMT has been able to stop the immediate bleeding, but is the patient stable?

Fundamentals Dragging AMAT Lower

AMAT is facing pressure on two fronts. First, some of its most important customers, like NVIDIA (NVDA), are seeing a slowdown in demand for their products, which is likely to lead to a slowdown in demand for AMAT's products. Second, the heightened trade-war rhetoric between the U.S. and China — even though it has cooled a bit this week — has investors worried that China will be forced to step up its efforts to close its semiconductor production gap with the U.S. sooner than they had previously expected.

The stock has been able to hold above the up-trending support level just below $50 so far, but if the stock starts to sink, it could complete a diamond bearish reversal pattern, with a longer-term price target of $37.50. 

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.