Of all the stocks on the move this week, one stock in particular made what we saw as a very meaningful move to the upside. Applied Materials (AMAT) is the stock in focus today for the bullish move to the upside made to start this week.
The area to watch was and still is 120 to 121, which provided little resistance to the price of the stock as it surged through this area with strong momentum. The play here is going to be a bullish one with a special focus on entry. Remember, just because a stock breaks through a level doesn’t automatically mean we chase the stock, that is how we get burned.
What would open the door to the best entry would likely be a pullback and retest of 120-121 to validate the move higher. If price was to pullback to this area and hold it, then one could look to enter calls with a stop set just below this area. We are looking to find the highest probability trade, not a guarantee, so there must always be a plan to manage our risk and not let a losing trade run into a loss that is too big.
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