Stocks This Week: Buy Applied Materials And American Airlines

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Photocredit: © 2016 Bloomberg Finance LP

© 2016 Bloomberg Finance LP

The S&P behaved as expected last week, rising based upon constructive July sentiment. This is option expiration week, which usually has a bullish bias. With the market at a new all-time high and breadth at new highs, the index is likely to rise. Thursday or Friday will likely mark a high followed by a pullback early in the following week.

Applied Materials shows a weekly cycle low on July 18th and a cycle high on August 14th. Momentum is turning up from oversold and relative strength has been strong. The shares could rise to a new high at $50.

Chart 1

The weekly cycle bottoms on the 18th.

Cycles Research Investments LLC

Chart 2

This strong stock is likely to rally to $50.

Cycles Research Investments LLC

The weekly price cycle for American Airlines bottoms now and tops on July 29th. Six of the nine buy signals have been profitable. This percentage is a bit low, but the technical picture is quite favorable. The stock broke out of a six-month price downtrend and relative strength is reversing to the upside. Momentum shows higher lows on a daily graph. The stock has risen in five of the last six Julys. The share price is likely to rise to $35.50-$37.50 area by late July.

Chart 3

The stock has begun to rally before the cycle low.

Cycles Research Investments LLC

Chart 4

The stock has broken through a downtrend line.

Cycles Research Investments LLC

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