{"id":8324,"date":"2021-04-01T16:38:32","date_gmt":"2021-04-01T20:38:32","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=8324"},"modified":"2022-04-06T15:04:54","modified_gmt":"2022-04-06T19:04:54","slug":"amat-breakout","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/amat-breakout\/","title":{"rendered":"$AMAT Breakout: Why We Bought Applied Materials Ahead of this Week’s Big Gains"},"content":{"rendered":"\n
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Every day in the new Morpheus Swing Trader Chatroom, we track the market live<\/em> and have the ability to notify members of explosive stock breakouts as they happen in real-time. <\/p>\n\n\n\n

The live trading room is a fantastic place to learn a winning swing trading strategy, especially for new traders.<\/p>\n\n\n\n

It’s also quite helpful for traders who are simply looking for an extra set of eyeballs to help generate profitable stock trading ideas during the day (no daytrading<\/em>, no hype<\/em>).<\/p>\n\n\n\n

On the morning of March 26, semiconductor stock Applied Materials ($AMAT) moved through its original breakout pivot and triggered a valid buy entry. <\/p>\n\n\n\n

We mentioned the $AMAT breakout in the swing trader chatroom<\/a> at 9:47 am ET, while the stock was trading near the $123.50 level. <\/p>\n\n\n\n

For members who missed the initial buy entry, we also called out a pullback buy entry around 11:00 am ET (near the $124.50 area). <\/p>\n\n\n\n

By the close, Applied Materials was 4% above the initial breakout entry and 3% higher than the pullback entry.<\/p>\n\n\n\n

We liked $AMAT due to its tight trading range above the rising 50-day moving average, with the price action hugging the rising 20-day EMA the past few weeks. <\/strong><\/p>\n\n\n\n

The March 26 breakout in $AMAT was confirmed by a pick-up in volume, which finished well above its average level (a bullish sign of institutional accumulation). <\/p>\n\n\n\n

The daily chart below shows the setup at the end of the breakout day:<\/p>\n\n\n\n

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Press chart to view full-size image<\/em><\/figcaption><\/figure>\n\n\n\n

The March 26 breakout in $AMAT was also a rally to fresh all-time highs. <\/p>\n\n\n\n

As explained in 3 Proven Ways to Know When Stocks may be Forming a Significant Bottom<\/em><\/a>, stocks that rally to new highs, while the Nasdaq is in correction mode, often become the next leadership stocks when the bull market returns. <\/p>\n\n\n\n

The relative strength line (bottom panel on the chart above) plots the daily price of $AMAT vs. the S&P 500 Index.<\/p>\n\n\n\n

It was bullish that the price and relative strength moved in sync to new highs. <\/p>\n\n\n\n

The price action that followed the previous<\/em> breakout was also a big clue that the stock had leadership potential. <\/p>\n\n\n\n

Below, notice the strong uptrend after the last breakout led to a gain of +80% in just a few months:<\/p>\n\n\n\n

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Press chart to view full-size image<\/em><\/figcaption><\/figure>\n\n\n\n

Applied Materials is easily one of the top, highly liquid movers in the semiconductor sector. <\/p>\n\n\n\n

$AMAT also boasts strong IBD ratings<\/a>, a key element of any CAN SLIM-based trading strategy:<\/p>\n\n\n\n

IBD Ratings for $AMAT<\/h4>\n\n\n\n