Many traders find themselves stuck in a cycle of inconsistent results, often because their technical signals aren’t providing a clear enough picture of the trend.

I developed the Green Flag Indicator to help address this specific challenge. It’s designed to provide more objective criteria for entries and exits, helping you move away from guesswork and toward a more structured methodology.

You can see how the Green Flag Indicator identifies these setups here: Read the Green Flag Strategy Breakdown

I hope this provides the clarity you’re looking for as you plan your trades this week and beyond.

Best Regards,

Chuck Hughes

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Today’s Bonus Story

KLA Sank After Earnings—Then Analysts Started Raising Targets

By Leo Miller. Originally Published: 2/3/2026. 

Quick Look

• KLA is one of the lesser-discussed leaders in semiconductor equipment, but its importance is undeniable.
• The stock has nearly doubled over the past 52 weeks, but it just sold off heavily post-earnings.
• Counterintuitively, Wall Street analysts boosted their KLA price targets by more than 10% on average following the results, signaling potential in the stock.

Within the wafer fabrication equipment (WFE) landscape, several high-profile companies tend to dominate the discussion. This includes firms like ASML (NASDAQ: ASML), Lam Research (NASDAQ: LRCX), and Applied Materials (NASDAQ: AMAT).

Despite attracting less attention than some of its peers, KLA (NASDAQ: KLAC) is a vitally important player in the WFE space and the broader semiconductor ecosystem. With a market capitalization near $185 billion, KLA is the fourth-most valuable company in the WFE industry. Over the past 52 weeks, KLA shares have delivered a total return of nearly 93%.

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That momentum hit a bump after KLA released its latest earnings report on Jan. 29. Even though the company beat estimates for revenue and adjusted earnings per share (EPS), the stock fell about 15% the next day. At the same time, several Wall Street analysts raised their price targets, which may present a buying opportunity for some investors.

Understanding KLA: Process Control Behemoth With Expanding Share

KLA is a dominant player in the semiconductor manufacturing process control market. Its equipment and software help manufacturers meet strict quality standards and run more efficient production lines. Two critical components of process control are inspection and metrology: inspection finds defects, while metrology measures dimensions at extremely small scales to ensure parts meet precise specifications.

Inspection and metrology help customers maximize usable product and minimize costs, improving manufacturing yields. KLA reported holding 54.4% of the process control market in 2021, more than four times that of its nearest competitor. By the end of 2024, the company said its share had increased 250 basis points versus 2019.

As semiconductor devices become more advanced, they demand greater process control, a dynamic KLA believes will allow it to continue growing market share across the WFE industry.

KLA vs LRCX: What Investors May Have Missed

In its latest quarter, KLA reported revenue of $3.3 billion, up 7.1% and slightly above expectations of $3.25 billion. Adjusted EPS was $8.85, up about 8% and ahead of the $8.75 consensus. Yet confusion over KLA’s outlook for industry-wide WFE growth triggered the post-earnings sell-off.

One day before KLA reported, Lam Research said it expects the WFE industry to grow from $110 billion in 2025 to $135 billion in 2026, implying roughly a 23% increase. KLA offered a similar 2026 expectation, saying the total WFE market should reach the “mid-$130 billion range.”

Where some investors got tripped up was in KLA’s separate reference to the “core WFE” market, which it said would grow in the high-single to low-double digits. That phrasing looks weaker than Lam’s 23% figure unless you account for differences in definitions.

KLA separates the WFE market into core WFE and advanced packaging. It estimates advanced packaging will grow from roughly $11 billion to $12 billion in 2026 and included advanced packaging in its WFE market definition for 2025. Lam did not include advanced packaging in its figures.

Using KLA’s definition, the overall WFE market would rise from about $121 billion to the mid-$130 billion range in 2026—roughly 12% growth—consistent with KLA’s statements. In short, KLA’s outlook is not necessarily weaker than Lam’s; some investors appear to have misread the company’s terminology, contributing to the sell-off.

Analysts Significantly Boost KLA Price Targets Despite 15% Fall

Despite the sharp post-earnings drop, MarketBeat tracked roughly 10 analysts who raised their price targets after the report. On average, those targets increased by about 12%, a stark contrast to the stock’s 15% decline.

Among analysts updating or issuing targets after Jan. 29, the average target is roughly $1,712, compared with the MarketBeat consensus near $1,583. Those levels imply about 21% and 12% upside, respectively. The newer forecasts that incorporate the latest results are noticeably more bullish than older projections, which is a positive signal for KLA’s outlook.

Even after the drop, KLA shares don’t look cheap: the stock’s forward price-to-earnings ratio near 35x is roughly 36% above its three-year average. Still, with AI-driven demand tightening semiconductor supply and the WFE industry well positioned, KLA—an established leader and market-share gainer—appears to have an upside-biased outlook.

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