Applied Materials just broke out above a key level. This bullish options trade takes advantage
Look at a bull put spread to bet on continued upside toward our $615 target while keeping the risk limited.
TL;DR
- AI sentiment led to a sell-off in Applied Materials, but the company's actual business performance remained strong, with record revenue and positive future guidance.
- The stock has broken out above $500 and its 50-day moving average, with short and long-term trends turning bullish.
- The semiconductor equipment sector is outperforming the S&P 500, and Applied Materials shows strong fundamentals with faster revenue growth and higher margins than peers.
- A defined-risk bullish trade using a November 500/480 put vertical spread is suggested to target $615, offering a credit of $9.55.
- The trade's maximum reward is $95 if the stock is above $500 at expiration, and maximum risk is $1,045 if below $480.