Asml

Verdict: a great business, a trigger that won't fire — wait

The strongest point for this idea is the quality of the business behind it: FY2025 revenue rose 15.6% to $32.7B, operating margin of 34.6% sits at the 95th percentile among 690 Industrials peers, free cash flow of $11.1B ranks at the 99.9th percentile, and shares outstanding fell 2.0% to 385.4 million. The strongest point against is the trigger itself: across 1,235 evaluated daily bars over 60, 24, and 12-month windows, the four-condition entry produced zero trades, and the requested bounded search for a more permissive setup ran out of its time budget with no candidate tested, so the strict live rules stand with no validated alternative. The setup is closer than its history suggests — price at $1,698.3 is already below the 50-day EMA of $1,725.85, and RSI at 45.9 needs only about 0.9 points to cross under 45 — but a further flush toward the 61.8% retracement followed by a reclaim is still required. A fixed -2.3% stop is tight for a semiconductor capital-equipment name that can gap through it on one guidance headline. The ownership file is also thin: the June 30, 2026 report period shows only 10 holders and about 246,386 shares, with the coverage deadline passed, so it is dated and single-reporter — not evidence of institutional conviction. If a pending, bounded search eventually validates a less restrictive entry that preserves the thesis, that would flip this toward actionable; until then, this is a watch-list setup on a high-quality name.

Trade now: ASML is one push away from a live setup

ASML last closed at $1,698.3, which sits below its 50-day EMA of $1,725.85, so the first entry condition is already met. The momentum gate is close: RSI (14) sits at 45.9 and needs to be below 45 — only about 0.9 points away. Two more conditions remain: a daily close that crosses back above the 50-day EMA, and a day's low that touches the 61.8% retracement level. In other words, the setup wants a further flush followed by a quick reclaim — a support-and-reversal entry, not a chase. Risk is defined mechanically. A filled position exits at a 2.3% loss (hard stop) or a 4.6% gain (hard take-profit), roughly a 2-to-1 reward-to-risk. Separately, the signal rules also exit if price closes back below the 50-day EMA, if RSI rises above 72, or if the close reaches the nearest resistance level at $1,772.15 — about 4.3% above the current price. Position size is capped at 25% of the book with roughly 2.3% of equity risked per trade. What "wait" means concretely: do nothing at $1,698.3. The trade becomes actionable only on a day where the low prints at or below the 61.8% retracement and RSI dips below 45, followed by a close back above the EMA. The strategy has been evaluated on real daily bars but has not yet opened an entry — this is a watch-list setup, and the levels above are the current distances to trigger.

A Quality Machine Waiting for Its Pullback: The Bull Case in ASML

The bull case here is not a momentum story — it is a quality story, and the fiscal-year 2025 numbers make it hard to argue with. ASML closed FY2025 (period ended December 31, 2025) with $32.7B in revenue, up 15.6% year over year, against a backdrop where the company sits at the 95th percentile of operating margin among 690 Industrials peers at 34.6% and the 99.9th percentile for free cash flow at $11.1B. Those are not rounding-error advantages; this is a business that converts an exceptional share of every revenue dollar into spendable cash. The year-over-year fundamental changes all point the same direction. Gross margin expanded 1.55 points to 52.8%, operating margin expanded 2.67 points to 34.6%, net margin expanded 2.63 points to 29.4%, and return on equity rose 8.02 points to 49.0%. Meanwhile, shares outstanding fell 2.0% to 385.4 million — the company is growing earnings power while shrinking the shareholder base. Net income reached $9.6B in FY2025, up from $7.6B in FY2024, and operating cash flow of $12.7B comfortably exceeded capex of $1.6B. R&D intensity of 14.4% (74th percentile among 370 peers) signals the company is reinvesting heavily to defend its position rather than milking it. The balance sheet gives this quality…

Scores

• Conviction score breakdown: 60
• Thesis support: 72
• Trade readiness: 40
• Risk quality: 48
• Trigger proximity: 62
• Fundamentals trend: 78

Watch items

• ASML — Daily close vs 50-day EMA ($1,725.85)
• ASML — RSI (14)
• ASML — Daily close crossing above 50-day EMA
• ASML — Day's low vs 61.8% retracement level
• ASML — Close vs nearest resistance ($1,772.15)
• ASML — Close vs 50-day EMA after entry
• ASML — Next dividend declaration
• ASML — Quarterly ownership filings (period 2026-06-30)