Creating a Trading Bias for a Chart

by | May 4, 2025 | Chart of the Week Past

In this Educational Chart of the Week Below,  

We Review: Creating a Trading Bias for a Chart - Below is a Checklist!

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The Master Trader top-down method of stock market analysis is a comprehensive approach that starts with a Techno-Fundamental perspective and narrows to individual stocks.

Master Trader uses a Top-Down method to educate students through courses and letter memberships

Creating a Trading Bias for a Chart

Before pulling the trigger on any trade, a trader must develop a clear bias—bullish, bearish, or neutral. This bias isn’t based on hope or headlines, but on a structured evaluation of what price, volume, and intermarket context tell you.

Here’s how to create a trading bias with confidence and consistency:

Applied Materials (AMAT) Daily and Weekly Time Frames

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Analysis of Applied Materials

AMAT is bottoming, and it moved above a consolidation, a red bar, which is positive.

It also has had a deep retracement that supports a higher bias, but prices are at Major Resistance. 

The 200-MA cannot be seen, but is on the chart at higher prices, which means AMAT has had a significant correction. 

These points suggest limited upside.

If prices could move sideways at resistance, that would be bullish, and that price action would support higher prices.

The weekly trend is down, but the last candle showed buyers on a dip. 

AMAT would not make the list for trades in the Advisory Swing and Options Trader letter at this time.

What are the odds of moving higher or lower based on the current market?

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The market measured by the NASDAQ 100 (QQQ) has a deep retracement, which is bullish.

It is at Major Resistance, and the 200-MA supports a bias that this market has limited upside in the short term. 

Since QQQ is at its 200-MA, but AMAT is not, AMAT is relatively weak compared to QQQ.

Key Takeaways:

Applied Materials AMAT is not a good trading opportunity at this time.

The market is at Major Resistance, and sellers are likely to take control, creating a short-term correction. Check the Internal Market Guides in the Advisory Swing and Options letter.

However, the depth of retracement suggests there should be willing buyers at lower prices.

If the correction is one through time (Sideways), that would be bullish and lead to higher prices for QQQ and AMAT.

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Happy trading!  If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com