Major Boost for Chip Sector

ASML shares fell 6.5% in the last close, with technical indicators pointing to weakness. Although the RSI at 34.9 is approaching oversold territory, the MACD line remains below the signal line and in negative territory, indicating short-term downward momentum. The price is trading below both the 20-day and 50-day moving averages, further weighing on the technical outlook. While the news headline may provide positive sector momentum, the current technical structure and sharp decline could make a short-term recovery challenging. Therefore, the likelihood of continued downward movement in the near term appears higher.

Although the headline suggests positive momentum for the chip sector, Applied Materials (AMAT) has experienced a sharp decline of 15.8% in the last 24 hours, with technical indicators appearing quite weak. The RSI is near oversold territory at 30.3, but the MACD remains negative and below its signal line, limiting short-term recovery potential. The price is well below both the 20-day (581.87) and 50-day (640.23) moving averages, indicating a continuing downtrend. Despite the positive news, the deterioration in technical structure and the sharp decline create near-term direction uncertainty. Therefore, a neutral outlook is more appropriate.

Although the news headline points to positive momentum for the sector, LRCX shares experienced a sharp decline of 16.8% in the last close, with technical indicators entering oversold territory (RSI 28.8). MACD values remain negative and below the signal line, while the stock is trading below its short- and medium-term moving averages (SMA20 and SMA50). This could limit the impact of the positive news, and the market may take time to digest the prior sell-off. Short-term direction is highly uncertain, requiring a stronger catalyst or price confirmation for a potential recovery.