Expected to test support zone before resuming 13-month uptrend

11-11-2016
AMAT @ 28.28 – Expected to test support zone before resuming 13-month uptrend

AMAT rallied 13 months to reach 31.07 (September 22, 2016 high) before consolidating. The pullback so far has been benign, down 11% to 27.56 (October 13, 2016 low). As the momentum indicator remains neutral, the stock is expected to consolidate further towards the 26.00-27.00 support zone. Beneath lies the key retracement of 38.2% of the 15.44/31.07 upswing at 25.23. As far as the key support area holds, scope remains for resuming the year-long trend back to 31.07. An upside break above the latter would confirm the bulls are back in control for new highs.
However, a downside break below the 25.23 area would suggest more downside towards the 23.40 area (50% of the 15.44/31.07 upswing).
Outlook:
Daily: neutral
Weekly: bullish
Monthly: bullish