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Chart of the Day For today’s Trade of the Day e-letter we will be looking at Applied Materials, Inc. stock symbol: AMAT. April 11th, 2024 Buy Alert: AMAT Poised to Trade Higher Dear Reader, For today’s Trade of the Day e-letter we will be looking at Applied Materials, Inc. stock symbol: AMAT. AMAT provides manufacturing equipment, services and software to the semiconductor, display and related industries. With its diverse technology capabilities, Applied delivers products and services that improve device performance, yield and cost. Now, below is a Daily Price chart with the 50-Day EMA and 100-Day EMA for AMAT. 50-Day EMA and 100-Day EMA ‘Buy’ Signal The 50-Day Exponential Moving Average (EMA) and 100-Day EMA are moving average indicator lines that can provide buy and sell signals when used together. When the shorter-term 50-Day EMA crosses above or below the longer-term 100-Day EMA, this provides either a buy or sell signal depending on which direction the stock price is moving. 50-Day EMA line Above 100-Day EMA = Price Uptrend = Buy signal 50 Day EMA line Below 100-Day EMA = Price Downtrend = Sell signalWhen the 50-Day EMA (blue line) crosses above the 100-Day EMA (red line) this indicates that the stock’s buying pressure has begun to outweigh the selling pressure signaling a ‘buy’ signal. When the 50-Day EMA crosses below the 100-Day EMA this indicates that the selling pressure has begun to outweigh the buying pressure signaling a ‘sell’ signal. Buy AMAT Stock As the chart shows, on December 6th, the AMAT 50-Day EMA, crossed above the 100-Day EMA. This crossover indicated the buying pressure for AMAT stock exceeded the selling pressure. For this kind of crossover to occur, a stock has to be in a strong bullish trend. Now, as you can see, the 50-Day EMA is still above the 100-Day EMA meaning the ‘buy’ signal is still in play. As long as the 50-Day EMA remains above the 100-Day EMA, the stock is more likely to keep trading at new highs and should be purchased. Profit if AMAT is Up, Down or Flat Now, since AMAT’s 50-Day EMA is trading above the 100-Day EMA and will likely rally from here, let’s use the Hughes Optioneering calculator to look at the potential returns for an AMAT call option spread. For this option spread, the calculator analysis below reveals the cost of the spread is $330 (circled). The maximum risk for an option spread is the cost of the spread. The analysis reveals that if AMAT is flat, up at all, or down -7.5% at expiration the spread will realize a 51.5% return (circled). Due to option pricing characteristics, this option spread has a ‘built in’ 51.5% profit potential when the trade was identified*. Interested in receiving actionable option spread trade recommendations? Sign up for my Wealth Creation Alliance to start getting them today! Option spread trades can result in a higher percentage of winning trades compared to a directional option trade if you can profit when the underlying stock/ETF is up, down or flat. A higher percentage of winning trades can give you the discipline needed to become a successful trader. The Hughes Optioneering Team is here to help you identify profit opportunities just like this one. ⚡EXCLUSIVE: Lightning Trades from Chuck! Chuck Hughes just launched his exciting new trading service program, Lightning Trade Alerts. This new service focuses on low-cost & short-term options trade. Members will receive hand-picked options trades from the 10-Time Trading Champion, Chuck Hughes. Call our team at 1-866-661-5664 or 1-310-647-5664 to join or CLICK HERE to schedule a call! Wishing You the Best in Investing Success, Chuck Hughes Editor, Trade of the Day Have any questions? Email us at dailytrade@chuckstod.com *Trading incurs risk and some people lose money trading. See Related ArticlesEnergy Sector Finds Bullish StreakTrading FI: Option Strategy Revealed Fresh Highs for Amazon: What’s Next? © 2024 Tradewins Publishing. All rights reserved. | Privacy Policy | Terms and Conditions | Contact Us If you didn't create an account using this email address, please ignore this email or unsubscribe using the link below. To ensure delivery of this email to your inbox and to enable images to load in future mailings, please add todaystrade@chuckstod.com to your e-mail address book or safe senders list. DISCLAIMER: Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by Legacy Publishing LLC. For additional information on auto-trading, you may visit the SEC's website: All About Auto-Trading. The information provided by the Legacy Publishing LLC (“Legacy”) Trading Services, newsletters and educational publications (“Services”) is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by Legacy a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. Past performance is not necessarily indicative of future results. Please note that results may not be typical and can vary from person to person. There are inherent risks involved with investing in the stock and options market, including the loss of your investment. Any investment is at your own risk. You should only trade or invest your "risk capital" – money you can afford to lose. | |
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