In June, we looked at the price chart of Applied Materials $AMAT shares, and assessed that there was a rounded top, and that the market is likely to be in a correction towards the $40 handle. Price action continues to suggest this bearish case. Note that the dip today came after an earnings report, where we saw earnings beat, but with a weak guidance:Applied Materials Inc. AMAT, -6.96% shares fell 3.7% in the extended session Thursday after the company beat on the top and bottom line but issued weaker-than-expected guidance for the fiscal fourth quarter. The chip and display maker reported fiscal third-quarter net income of $1.17 billion, or $1.17 a share, compared with $925 million, or 85 cents a share, in the year-ago period. Adjusted for items related to acquisitions and taxes, among other things, earnings were $1.20 a share. Revenue rose to $4.47 billion from $3.74 billion in the year-ago period. Analysts surveyed by FactSet had estimated adjusted earnings of $1.17 a share on revenue of $4.43 billion. For the fiscal fourth quarter, analysts expect adjusted earnings of $1.17 a share on sales of $4.46 billion. The company said it expects earnings adjusted for completed acquisitions and stock-based compensation of 92 cents to $1 a share and sales of $3.85 billion to $4.15 billion. Applied Materials stock closed down 0.2% to $47.43 during the regular session, as the S&P 500 index SPX, -0.01% gained 0.8%. (MarketWatck.com)AMAT Daily Chart(click to enlarge)Price Top:- In June, we were looking at price breaking below the 200-day simple moving average (SMA), and cracking the rising trendline. - After the breakdown, price rebounded from a previous support pivot at $45 a share.- However, we saw the market reject the rally at $50. Meanwhile, the RSI held below 60 for the most part. - These are signs that bears are in control, and the $40 target is indeed in sight.