AMD stock has fallen hard but is finding its footing and outperforming the market. Here’s how to trade it from here.
Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report stock on May 23 stumbled out of the gate, then flipped positive.
The chipmaker’s stock lately has been trying to hold up following a five-week skid. Amid that decline, the company reported impressive earnings and issued solid guidance.
Though it has traded lower in the past two weeks but gave up just 2%. Relative to the S&P 500 and Nasdaq, which fell 5.4% and 6.5%, respectively in that span — AMD stock did pretty well.
Now, this stock back is back on traders’ focus list.
The bulls broadly are trying to find their footing in the market. If they do, AMD stock is likely to be a go-to name.
Second, Nvidia (NVDA) – Get NVIDIA Corporation Report will report earnings on Wednesday, May 25, after the close. If the company delivers upbeat results, it might spark AMD stock, too.
Trading AMD Stock
Weekly chart of AMD stock.
Chart courtesy of TrendSpider.com
When we measure AMD from the late-2021 high down to the March 2020 covid lows, the 61.8% retracement comes into play near $85.50.
That level held as support before, during and after the company reported its earnings results on May 3.
From here, the $100 level continues to loom large. While once a vital level of support, this zone clearly has turned into resistance. That has been the case since April, when this level finally failed to buoy the stock price.
Now with AMD stock trapped between $85 and $100, it also has the declining 10-week moving average in play near resistance.
While the stock has been able to reclaim this measure of active resistance at times, it has not been able to close above it on a weekly basis since late March.
Before that, the bulls would have to go all the way back to late 2021 to find the most recent time AMD closed above the 10-week.
If AMD stock can find a way to clear $100, then last week’s high (and the May high) at $104.22 is in play. Above that opens the door to the $108 to $112 area. In that zone, we find the 21-week and 50-week moving averages, along with the 61.8% retracement of the current zone.
On the downside, a break of $90 puts last week’s low in play near $88.25. Below that and the key $85 area is in play.
If AMD stock loses $83 and can’t reclaim it, we could be looking at a sharper dip down into the $73 to $75 area. But that likely comes alongside a broader market decline as well.