.

Swing Trade Idea (AMAT) – June 06, 2022

The major equity indices stalled slightly this week after a performance the week before. However, it is encouraging that equities did not move lower and look to be consolidating before what could be another burst higher. SPY and QQQ are trading above their key support areas at $400 and $300 respectively. However, resistance is not too far for both indices so we may experience more consolidation in the upcoming days. The macro picture has eased somewhat with the Fed signaling they are not as hawkish as what was being priced in, however, this may change depending on inflation and labor market data. With oil breaking out and grinding higher, it will likely continue to play a part in higher inflation and slower consumer spending. For this reason, defensive sectors are still attractive despite their recent underperformance relative to higher growth sectors. 

AMAT Bullish Trade: Our bullish trade idea today is Applied Materials (AMAT). AMAT is part of the Technology sector and the semiconductor industry, both of which have experienced a strong rebound in recent weeks. Price has recently pulled back after rebounding higher which provides an excellent bullish entry point for a move higher. The 1M trend has now turned bullish and 6M trend will likely follow should price continue to rebound. The next area of resistance is near $120 and should that level break, $140 would be the next target.