AMAT chart since 1998:
Excluding the 2000 bubble top, subsequent tops line up nicely on the log chart, a clear declining trend-line. This is what happens in secular bear markets, even to dominant well-managed companies. Therefore, 15$ is a good place to sell, next upcycle. That means, you've got to buy it at $7.50, to have a reasonable hope of a double.
10$ was support in mid-2010, 2003, and 2002. Only during the depths of the last recession, has AMAT been significantly below 10$, going all the way back to 1998. It is rare, but possible, to see an RSI below 30 on the monthly chart. AMAT was there in late 2008. If we get a double-dip recession, it could happen again. If the 10$ support line fails, we will likely take out the 2008 lows during the current down-cycle.
disclosure: I'm short KLIC, MU, ARMH. No long positions, in semis or equips. I'll short more, on any strength in the SOX. I intend on loading up on AMAT, at around $8. |
