My intermediate-term work on Applied Materials (AMAT) indicates that the August 31 low at 10.27 ended the correction of the upleg from the November 21, 2008 low at 7.80 to the Jan 11, 2010 high at 14.94. At that time, a new upleg commenced that hit its first high on November 9 at 13.08.

My near-term work indicates that the double bottom lows of 12.30 on November 23 and November 30 ended a 6 percent correction off of 13.08, and that all of the action since then represents the start of another upleg that is heading for a test of 13.08. If hurdled and sustained, this should trigger upside follow-through towards 13.80 thereafter.

At this juncture, only a break of 12.30 will invalidate my current positive technical outlook.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.