Applied Materials Rises 5.48% to $200.52 Extending Six-Day 19.50% Rally

Applied Materials (AMAT) concluded the latest session with a notable 5.48% gain, closing at $200.52. This marks the sixth consecutive day of advances, culminating in a 19.50% surge over this period. The stock traded between $192.43 and $201.15, reflecting robust bullish momentum. Below is a technical analysis synthesizing multiple methodologies, adhering to the specified framework.
Candlestick Theory
Recent price action exhibits a pronounced bullish sequence, including a cluster of long green candles culminating in a strong closing near the session high ($201.15). This pattern suggests sustained buying pressure. Key resistance is evident at $201.15 (today’s high), while support lies at $190.10 (September 19 low), which previously acted as resistance. A breach above $201.15 may target $215–$220, while failure to hold $190 could signal a retracement.
Moving Average Theory
The 50-day moving average (MA) currently slopes upward near $180, reflecting short-term bullish momentum. The 100-day MA ($175) and 200-day MA ($170) both trend higher, confirming a long-term uptrend. The current price ($200.52) trades comfortably above all three MAs, indicating robust bullish alignment. A golden cross materialized earlier this year (50-day above 200-day), reinforcing structural strength.
MACD & KDJ Indicators
The MACD (12,26,9) displays a widening positive histogram, signaling accelerating upward momentum with no immediate divergence. Concurrently, the KDJ oscillator shows the %K line above %D in overbought territory (KDJ >80), suggesting short-term overheating but no bearish crossover. While MACD supports continuation, KDJ’s overbought condition advises vigilance for potential pullbacks.
Bollinger Bands
Bollinger Bands (20-day, 2σ) have expanded notably during the six-day rally, reflecting increasing volatility. Price consistently hugs the upper band, underscoring bullish dominance. The absence of contraction or price rejection implies continued upside potential. However, a mean-reversion toward the middle band ($190) remains plausible if volatility subsides.
Volume-Price Relationship
Volume surged during the initial rally days (e.g., 18.9M shares on September 19), validating breakout legitimacy. Recent volume tapered slightly (15.5M today), but remains above the 10-day average. This divergence between rising price and moderating volume hints at potential exhaustion, necessitating confirmation from upcoming sessions.
Relative Strength Index (RSI)
The 14-day RSI reads 78, exceeding the overbought threshold (70). Historically, AMAT has sustained such levels during strong trends (e.g., April 2025 rally). While not a standalone reversal signal, it warns of stretched conditions. Probabilistically, a consolidation or minor pullback may precede further gains.
Fibonacci Retracement
Applying Fibonacci to the trough ($161.76 on August 15) and recent peak ($201.15):
- 23.6% retracement: $191.85
- 38.2%: $186.10
- 50%: $181.45
- 61.8%: $176.80
Confluence exists at $186.10 (38.2% Fib aligned with the September 17 high and 50-day MA). This zone offers robust support in case of profit-taking.
Confluence and Divergences
Confluence reinforces the bullish outlook:
- Moving averages stack bullishly (50>100>200).
- MACD momentum supports price highs.
- $186–$191 Fibonacci/MA zone provides layered support.
Notable divergences include:
- RSI overbought reading against new highs.
- Volume contraction during the last two rally days.
These suggest near-term consolidation but lack reversal confirmation.
Overall Probabilistic Outlook
Technical indicators collectively favor upside continuation, though short-term overbought signals warrant caution. Sustained trade above $201.15 could catalyze a move toward $215–$220. Conversely, a breakdown below $186.10 (Fibonacci/MA confluence) may trigger a deeper retracement to $176–$180. Volume resurgence on future advances remains critical to validate trend sustainability.