Applied Materials Surges 5% in Session, Three-Day Rally Hits 10.09% on Bullish Technical Signals

Applied Materials (AMAT) has surged 5.00% in the most recent session, extending a three-day rally with a cumulative gain of 10.09%. This upward momentum warrants a detailed technical analysis across multiple frameworks to assess its sustainability and potential reversal points.
Candlestick Theory
Recent price action reveals a strong bullish bias, with the stock forming higher highs and higher lows over the past three days. The 2025-11-25 session closed at $242.46, forming a tall bullish candle with a shadow extending from $233.13 to $244.62, indicating strong buying pressure. Key support levels include the 2025-11-20 low of $220.23 and the 2025-10-30 low of $232.55, while resistance is likely clustered around the recent high of $244.62. A potential "Bullish Engulfing" pattern is evident as the most recent candle engulfs the prior bearish session, suggesting a continuation of the uptrend.
Moving Average Theory
The 50-day moving average (approx. $225–$230 range based on mid-November data) currently sits below the 200-day MA (around $185–$190), forming a bearish "Death Cross" historically. However, the 100-day MA (closer to $230) is approaching the 50-day MA, hinting at short-term convergence. The price has recently crossed above the 50-day MA, indicating a potential short-term bullish crossover. This suggests intermediate-term buyers are stepping in, though the long-term trend remains bearish until the 200-day MA is decisively breached.
MACD & KDJ Indicators
The MACD histogram is expanding positively, with the MACD line (12-day EMA minus 26-day EMA) rising above the signal line, confirming momentum. The KDJ indicator (Stochastic) shows a bullish crossover as the %K line crosses above %D in overbought territory (>80), aligning with the recent rally. However, the KDJ’s overbought condition (>80) may signal a near-term pullback risk, particularly if the MACD begins to diverge from price.
Bollinger Bands
Volatility has spiked, with the 20-day Bollinger Bands expanding significantly. The current price of $242.46 is near the upper band, indicating overbought conditions and heightened volatility. This suggests a potential consolidation phase or reversal, as prices often retrace toward the 20-day SMA ($230–$235 range) after touching the upper band.
Volume-Price Relationship
Trading volume has surged during the recent rally, with the 2025-11-25 session seeing 8.33 million shares traded, above the 30-day average. This supports the validity of the price increase, as strong volume confirms buyer participation. However, if volume begins to wane while prices continue to rise, it could signal weakening momentum.
Relative Strength Index (RSI)
The 14-day RSI is currently above 70, confirming overbought conditions. While this typically warns of a potential pullback, AMAT’s recent breakout suggests the overbought level may persist for a short period if the trend remains intact. A close below 60 would likely signal a shift in momentum, though divergence between RSI and price should be monitored for early reversal cues.
Fibonacci Retracement
Applying Fibonacci levels between the 2025-08-15 low ($161.75) and the 2025-11-25 high ($244.62) reveals key support at 61.8% ($204.00) and 38.2% ($188.00). The current price is well above these levels, but a pullback to the 50% retracement ($204.00) could trigger renewed buying interest.
Confluence and Divergences
The bullish case is strengthened by the alignment of the MACD, KDJ, and volume, all supporting the recent rally. However, the RSI and Bollinger Bands suggest overbought conditions, creating a potential divergence if price fails to sustain above $244.62. The 50-day MA and Fibonacci levels at $204.00 represent critical confluence points for support, where a rebound could reaffirm the uptrend.
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