Shares of Applied Materials (AMAT) closed Monday’s trading at a critical price.
The semiconductor stock closed just slightly above the $170, signaling that investors may be in for a rough few weeks from this technology giant.
Last month, Applied Materials shares fell sharply from $190 to $170 following the company’s latest earnings results.
On November 14, Applied Materials posted earnings that were slightly higher than analysts’ expectations, but AMAT’s management failed to raise the next quarter’s expectation.
Shares quickly dropped to $170, where they found short-term support. That support has been short-lived though as Applied Materials shares are once again breaking below $170.
Investors will now increase their selling of the stock over the next 2-4 weeks, which may be magnified by broader market-based selling as we head into what is normally a seasonally weak January.
Making matters more dire, this week’s decline has moved Applied Materials below its long-term 20-month moving average. The break below its 20-month trendline puts Applied Materials stock in a long-term bear market trend.
With the company’s earnings slated for late-February, investors should expect a target price of $150 for Applied Materials.
