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Short-Sale Set Up - Applied Materials (AMAT) & Lam Research (LRCX) 1/5/21

Applied Materials (AMAT) is in a late-stage failed-breakout (LSFB) chart position after failing on a recent breakout and dipping below the 20-day exponential moving average. This puts it in a short-sale entry position using the 20-dema as a covering guide.

Lam Research (LRCX) is another semiconductor equipment manufacturer and therefore a close cousin to AMAT. It is showing an identical pattern as it begins to break below its 20-dema in a breakout failure. In this market, stocks tend to correlate closely, so we would monitor this along with KLA Corp. (KLAC) as potential short-sale targets as they break below their 20-demas.
KLAC has yet to break its 20-dema, and can be watched for any break below the line as a short-sale entry trigger. This would likely occur as AMAT and LRCX move lower. In all three cases, short-sale entry triggers at the 20-dema would also use the line as a tight covering guide.

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