MARKETS: YF Premium Investment Idea: Applied Materials (AMAT)

Yahoo Finance's Jared Blikre breaks down some of the features of the Yahoo Finance Premium package.

Video Transcript

- Jared Blikre is with us right now. Too much of a good thing, these markets going up?

JARED BLIKRE: We'll watch it into the close, Adam, but we-- right now, we have the Dow up over 800 points. So we can see here on the Wi-Fi interactive better than 3%, almost 3.5%. NASDAQ up over 2%, but underperforming the S&P 500, which is up 3%. So let's take a look at what's going on here.

This is a year-to-date chart. And we can see that we're just testing these highs that we saw in April. That would be the FOMC highs. So essentially, we've been in a trading range. And we did have a breakdown last Thursday that caused the bears quite a bit of consternation. We could have a similar break to the upside that breaks down. We've had a lot of false starts here. But for-- in the meantime, it's nice to see this rally underway. We've got the VIX under 30 yet again, and the SOX, the Philly chip index, is progressing nicely, as well. It's outperforming, up 4%. And you can see it's reaching its April and May highs, as well.

Let's take a look at the sector performance. Right now, we have energy leading to the upside, up over 7%. And that's on the back of a crude oil rally that has it up over $30 per barrel. Actually, about 32, up over 10%. Now we have industrials up over 6% and materials up over 4%. And so we have cyclicals and value leading. Even financials are up over 4%. These are a lot of the dogs, so a lot of the bears are gonna say, well, we've got the dogs of the previous downturn leading today. Well, all rallies begin with short covering, and that's what we're seeing right here. Pulling up the rear, we have consumer staples and health care.

But I want to get to now a premium-- Yahoo Finance Premium idea. And this is an Applied Materials. And this is based on investment-- excuse me, a research report by Argus Research. And this is a fundamental analysis on Applied Material after their earnings report. And they're saying the stock has tugged in different directions on news that Taiwan Semi is planning to build a semiconductor foundry in Arizona, while the Commerce Department may further restrict shipments to Huawei. So bullish and bearish. Despite geopolitics and the pandemic, Applied Material entered fiscal third quarter with record orders and record backlog for its semiconductor and service businesses combined.

So they're saying the shares appear attractive based on valuation, as well as prospects for long-term top-line growth and margin expansion. Their target is $80. So that would be somewhere up here. Now, this is a long-term play, so if you're looking to play this long-term, probably have a stop below these lows here at about 35. A shorter-term play, if you're just looking to trade it, you could place your stop here at 45. You can get Yahoo Finance Premium on a trial basis for 14 days by signing up at our site. And that is our Yahoo Finance Premium investment idea of the day. Adam.