We examine the BCI Premium Stock Report on the Sunday May 23, 2021, after expiration Friday, for our Monday trade selections. One of the securities we choose is Applied Materials, Inc. (Nasdaq: AMAT). On Monday morning, May 24th, AMAT gaps up well above the price movement of the S&P 500. Is AMAT now too expensive? Should we still consider this stock or look for an alternative? This article will investigate the factors that caused the price gap-up and make some common-sense conclusions regarding the next-steps.

 

What caused the gap-up?

On Friday 5/21/2021 AMAT announced a stellar earnings report resulting in the gap-up as the May contracts expired. There was a 5.2% earnings surprise and a 3.2% revenue surprise as shown on the site www.earningswhispers.com:

AMAT: Positive Earnings and Revenue Surprises

 

There’s more

On Monday May 24th, IBD named AMAT its Stock of the Day further enhancing the gap-up in price:

AMAT Named IBD Stock of the Day

 

Price chart of AMAT pre- and post-earnings

 

AMAT Price Chart May – June 2021

 

After the 2 gap-ups, AMAT moved to a consolidating chart pattern, out-performing the price movement of the S&P 500. We now know that the gap-up was based on outstanding corporate fundamentals. We ask ourselves if we would buy AMAT today at the current price. For me, good news is a positive and would encourage me to consider this stock. I may wait a day or so for the price to settle but the overall picture for AMAT was only enhanced.

 

Discussion

Good news should not discourage us from incorporating a stock into our option-selling portfolios. Researching the cause of one or more gap-ups does make sense. If the gap-up is based on sound fundamental data, all systems are “go”. Stock prices go up and down and this is the risk we are willing to take in return for beating the market on a consistent basis. More often than not, there will be a reversion to quality, the type of securities identified in our BCI reports.

 

No price increase for premium members

On November 1, 2021, BCI will be raising membership rates for new members only. This will not apply to current members. It’s been 4 years since we had a rate increase. In that period, we have added dozens of training videos, additional downloads and resources and more quality data to our stock and ETF reports. We are fortunate to have such a robust and expanding membership and strive to provide the best high-quality information and tools at the lowest industry prices.

This price increase will not apply to current active members as you are grandfathered into the current rate for life or as long as your membership remains active. This is our way of showing our appreciation to our long-term members.

The increase for new members will go into effect on November 1, 2021 as follows:

Monthly: $19.95 for the first (trial) month and $57.95 each 30-days thereafter (currently $49.95).

Annual: $657.40 for the first 13 months (includes a reduced first month and a free last month) and then $695.40 every 13 months thereafter (includes 1 free month). Currently $569.40 and $599.40.

All new members who subscribe between now and 10/31/2021 will be grandfathered into the current rate and will see no price increase on 11/1/2021.

Thanks to all our loyal members for your support over the past 14 years and for putting on the financial map.

Premium membership information

 

Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to share some of these testimonials in our blog articles. We will never use a last name unless given permission:

Alan,

I have been subscribing to your service for many years and I notice the many improvements you have made in your publication over the years. I am grateful for the covered call knowledge you have taught me.

Some twenty years ago the covered call knowledge you taught me enabled me to make profits that made it possible to send my daughter to attend Smith College for four years.

Sincerely yours,

Stephen

 

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Alan speaking at a Money Show event

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Market tone data is now located on page 1 of our premium member stock reports and page 1 of our mid-week ETF reports.

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