AMAT Today
Yesterday I said that I expected SPY and XLK to trend up today. As a result, I'd consider trading AMAT and SPY. The reason being, XLK (Technology) is the biggest mover of SPY, and AMAT is part of XLK.
Now, while AMAT is not the number one holding of XLK, it is still within the top 10.
| Rank | Symbol | Company Name | Fund Weight | Today's Return | Spread vs. XLK | Performance Status |
| 1 | NVDA | NVIDIA Corp. | 14.12% | $+1.35\%$ | $+0.32\%$ | Outperformed |
| 2 | AAPL | Apple Inc. | 12.23% | $+0.12\%$ | $-0.91\%$ | Underperformed |
| 3 | MSFT | Microsoft Corp. | 8.39% | $+0.45\%$ | $-0.58\%$ | Underperformed |
| 4 | MU | Micron Technology | 5.55% | $+1.82\%$ | $+0.79\%$ | Outperformed |
| 5 | AVGO | Broadcom Inc. | 5.30% | $+1.14\%$ | $+0.11\%$ | Outperformed |
| 6 | AMD | Advanced Micro Devices | 5.01% | $-0.22\%$ | $-1.25\%$ | Underperformed |
| 7 | INTC | Intel Corp. | 3.70% | $-0.95\%$ | $-1.98\%$ | Underperformed |
| 8 | CSCO | Cisco Systems Inc. | 3.13% | $+0.05\%$ | $-0.98\%$ | Underperformed |
| 9 | LRCX | Lam Research Corp. | 2.51% | $+3.15\%$ | $+2.12\%$ | Outperformed |
| 10 | AMAT | Applied Materials Inc. | 2.25% | $+5.29\%$ | $+4.26\%$ | Top Outperformer (Alpha) |
In the table above, we see that AMAT makes up 2.25% of XLK, it is the lowest weight within the top 10 companies. However, as shown above, today was the day of the underdog to say the least. We closed the day with a 4.26% spread against XLK with a 5.29% return overall.
In the above chart, I've kept the 2 day uptrend from the last two trading days in addition to the resistance and support I looked at on Monday night. Today, on the 26th of May, we see that the trend continued to uptrend and saw a 52 week high of $456.78
So, I entered a contract today on AMAT around 10:00AM, where my expiration was set to $477 strike price expiring on May 29. However, as usual, I don't hold stocks overnight and go for intra day trading options. As a result, I did sell my contract around 11, which lead to a 16% return. Now, I must admit given that it was my first time back before jumping in, I exited and while I could've had a 25%-30% daily gain, protecting my capital was more important to me.
Let's move on.
After today's performance, the biggest threats tomorrow are XLK, XLI, XLB. Currently my only consideration is Honeywell.
I do feel a bit hesitant about it, as the stock has already reached the overbought position. However, I will monitor it and see if there's a good entry in the morning. Lastly, I will also track XLK and XLU to understand if there are other potentials within those two sectors.
Let's see what tomorrow awaits us!
Member discussion