Amtech Systems, Inc. was incorporated in Arizona in October 1981, under the name Quartz Engineering & Materials, Inc., and changed to its present name in 1987. Amtech also conducts operations through their two wholly owned subsidiaries, Tempress Systems, Inc., a Texas corporation with all of its operations in the Netherlands, and P.R. Hoffman Machine Products, Inc. They develop, manufacture, market and service, wafer and semiconductor fabrication equipment and related spare parts for the worldwide semiconductor industry. The Company’s business is divided into two business segments: semiconductor equipment, and polishing supplies. (Source: Bigcharts)

Now that you know what Amtech does it is time to find out why this little gem is being added to the Jutia Portfolio. First, let me direct you to the chart. Here I would like you to look at the volume. It may be a little hard to see but it is those thin little black and red bars just below the price. You will notice that recently there was a big black volume bar, indicating that there was heavy buying (accumulation) of shares. If this buying were to occur at the end up an uptrend you would be worried about the stock losing its ability to maintain upward momentum. However, in this case the buying occurred at the end of consolidation, meaning that the party is just getting started.

Next, let’s analyze this trendline I have drawn. The price above this line is defined by a Japanese Candlestick Pattern known as Head & Shoulders because a left shoulder forms along with the head and right shoulder. When you see this pattern in its final stages of development you should pay close attention to the neckline that cuts right beneath both shoulders. If the price collapses below this line, all bets are off and you should liquidate your position immediately. In the event that the price stays firmly above the neckline then it is highly likely that you will see a strong breakout to the upside.

So now that both the recent volume and candlestick formation have wet the appetite, it is important to get a sense of just how strong the momentum really is and whether or not the stock will hold up and head higher. Here is where the MACD and DMI factor kick in. I have circled both the MACD and DMI in green on the chart exactly where a buy signal is given. As long as the signal was given within the past two weeks you should be alright. Remember that we are looking to capture the “sweet spot” in any trend, NOT the bottom or top.

Those are the high-risk investment areas…

With the MACD I am looking for the black line to cross above the red line. In regards to the DMI, I am looking for the green line to rise above the red. When both of these indicators say to buy together it is a no brainer, as long as the signal was given recently and not long ago. If the signal was given quite some time ago in the past you can be assured that the stock has already risen to far to catch any decent profits with low risk.

Our Recommendation: Buy share of ASYS at or near $7.90 and place a 5% stop loss below your purchasing price.

Good Investing…