My intermediate-term work on Applied Materials (AMAT) indicates that the Aug 31 low at 10.27 ended the correction of the upleg from the Nov 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 Nov 9 at 13.08.

My near-term work indicates that the double bottom lows of 12.30 on Nov 23 and Nov 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.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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