Applied Materials - New highs probablyThe weekly chart is in a clear uptrend. After a bearish divergence, price returned to value, and just got oversold. The high volume week warns of a selling climax (after a very short fall).
On the daily chart, there is a double bottom with a false breakout. The doji labeled on the chart has very high volume, a rare occurrence that really adds weight to the doji. The volume indicators point to oversold, as the wave volume is climactic and the Force Index is climbing back into its channel.
Note that both impulses are red, which makes this trade dangerous, however the risk reward is very attractive. One could enter directly on the open (me) or could wait some more time for a blue daily impulse. If the stock gaps down on Monday, I am going to wait for a blue impulse as well.
