Advanced micro-devices (AMD) – Get the report Advanced Micro Devices, Inc river higher on Monday, after some of the late purchases that gave it a big boost on Friday.
For what it’s worth, Nvidia (NVDA) – Download NVIDIA Corporation report also rips higher in the session, while tech stocks generally trade quite well.
However, AMD must now report earnings on Tuesday after the closure. The report will be closely followed by growth investors as well as those focusing on Nvidia and other semiconductor stocks.
AMD stocks roared to life a few months ago, bombing their way to new records in November.
While not many investors are so surprised that AMD – and Nvidia for that matter – rose higher at the time, it came at a time when many growth stocks were under intense selling pressure.
Now that both stocks have fallen around 39.5% at the recent low, it has investors wanting to get long.
Now we wonder if the AMD stock jumped too early.
Trading in AMD shares
Last Friday, the AMD stock opened at $ 101.55, fell to $ 99.35 and …
Stop right there.
The stock fell to $ 99-and-change was the buy zone. This area was resilient in the fourth quarter of 2020 and in January 2021, and was the outbreak level in the third quarter of 2022.
Later this zone was support in September and October. In other words, every bull should have had $ 100 written down and circled with warnings on their trading platform set.
Especially when stocks fell around 40% and with 200-day and 50-week moving averages so close.
With such a strong jump on the way, we have to wonder if the stock is using too much energy ahead of earnings – depending on how it trades tomorrow, of course.
On the negative side, you know the level you should see: $ 99 to $ 100 and last week’s lowest.
A genetic test of this zone could set AMD stocks up for yet another jump to the upside. A break in this area and failure to regain it puts the 21-month moving average into play.
If the stock continues to rise after earnings, look for a weekly up-try near $ 117.15. If stocks can handle this level, it puts the falling 10-week moving average into play, followed by the 21-week moving average and the weekly VWAP target.
AMD is a very good company with solid growth and consistent demand from investors. The wider market price action has had a negative impact on the stock, but earnings will tell the story.
If we get a bullish reaction on earnings, then let’s see how strong the rejection is.