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Thanks for the seasonality data. Wow. It looks like you should never hold AMD from May to August.
This is an investment board. Talking about momentum and entry/exit strategies in regards to AMD is a lot more valid than some of the other pissing contests that go on around here.
Knowing whether AMD is in a downtrend or uptrend is useful information for people seeking to enter or exit a position. A lot of TA is analyzing momentum.
For instance AMD is in an uptrend very short term (intraday), a downtrend on a daily basis, and still in an uptrend on a weekly basis. Trends tend to continue in the absence of fundamental changes.
striped candlestick with an ascending goose-neck pattern. *That* would spell $30 within 17.35 trading days
LOL. I think you're on to something.
All kidding aside, TA is pretty useless long term. The fundamentals are going to win out. It all comes down to Q4 earnings expectations and results, and beyond that outlook of 04.
If you believe in AMD, you don't need TA to tell you to buy. In fact if you use TA you might just miss out on buying as you'll probably be trying to guess a bottom. Just buy now, and the short term will become noise in a couple of months.
So TA might get you are short term advantage or it might not. It is a game of probability. You are generally better off not to use it unless you are an active trader. It does have merit for some of us who trade frequently.
The price is still nearer the lower end of the band on the 3 month chart.
I assume you mean a daily chart showing 3 months of time (are you using a 20 day time period?). The Bollinger there looks bearish. The 20 day MA is inflecting down, and AMD is just creeping back above the lower band.
If you believe in chart patterns, the intraday chart shows a bullish diminishing wedge on diminishing volume after a run up. This is a continuation pattern. It will likely resolve before the day is over. I expect AMD will have a strong close (above $15.30), but this is useless unless you are a intraday trader.
HailMary, unfortunately that is not happening.
I wouldn't expect these things today.
Next week is option expiration, and the max pain is up around 16-17 this time. We haven't been below max pain for a while going into expiration week, so it should be an interesting week. My guess is we'll close above $16 by next Friday. After that I'm guessing up, up, and up going into Q4 earnings announcement.
We crossed upper bollinger band like a cake.
I'll feel better when we're back above the 50 day MA and momentum is up on a daily chart. If that happens we will not likely see AMD at these low prices for a long time to come.
HailMary
I think it's so cool to have something in cash when stock goes to $3 or to $30.
I have some cash now, but it will be gone if I take assignment (2000 shares). I always like to have reserves, and they are running lower than I normally like. Like I said I'm a little overbought (not just in AMD), but I will remedy that in time. I'll be entering my exit (or at least lighten) stage starting in January and proceeding over several months, for better or worse. I'll probably do straight sells on the overbought shares after a return to $17 or so to minimize short term risk, and then start writing covered calls on the bulk of my shares over a longer time period.
HailMary
I think I'm going to avoid the IRS hassle and just hold the puts and get assigned. I think AMD will be above $17 by January, so I just need to show some patience. I normally don't put myself in a situation like this, so I'm a little out of my element. I hope the risk I am taking doesn't burn me.
HailMary
Anyway, we are heading for the best close sinse last Thursday.
I'm going to stick my neck out and guess this is the bottom, and it will be sideways and up (possibly way up) from here going into Q4 earnings. The volume today was very good, and it is no longer acting like a selloff. If I wasn't already over leveraged to the upside, I would be buying.
Market forces are still the primary factor here though, so if the market tanks, AMD is going with it in all likelihood.
HailMary
chances of someone finding a simple careless mistake like this?
Slim. It would be nice to know the rule instead of being blindsided in an audit though...here is a snippet from a tax advisory document:
In addition, the Internal Revenue Service has
taken the position that the wash-sale rule will disallow
a loss on the sale of stock if, within 30 days
before or after the sale of the stock, the taxpayer
sells an “in-the-money” put option with respect to
the stock and, on the basis of objective factors at the
time the put was sold, there is a substantial likelihood
that the put will be exercised. These factors
include the spread at the time the put is sold
between the value of the underlying stock and the
exercise price of the put, the premium paid and the
historic volatility in the value of the stock.
Pretty fuzzy.
I think I would be safe here as long as I write out of the money puts (which is what I intended to do). Since I'm essentially selling the stock at a loss by closing the put, it fits with the above statement.
HailMary
Is an option at a different month and strike price "substantially different"?
I would be taking a loss this year, and replacing the position with a very similar position that would result in a gain next year if the stock remains at the same price. Sounds like a wash. I could close the puts and buy stock outright. That qualifies as a wash for sure. Instead of taking an assignment, I could do this and essentially declare part of the loss now. It is just like selling the stock this close to expiration (very little time value).
Time to dive into the rules.
HailMary
Large volume spike just now. Somebody is buying (and selling)
12/10/2003 15:42:12 14.680000 644500 nasd Trade
12/10/2003 15:42:43 14.680000 644500 nasd Trade
12/10/2003 15:43:53 14.700000 568600 nasd Trade
HailMary
and follow "Max pain history" link.
Thanks for this link! Very useful information.
I think we are approaching a bottom here, but it looks like it is probably going to trade sideways for a while.
I'm still holding tight (long shares, long Jan 19 calls, short Dec 17 puts). I doubt I'll see any return on my Jan 19 calls, but that is ok since they were rolled from earlier Jan 15 gains.
I'm tossing around the idea of rolling the Dec 17 puts instead of taking the assignment that is highly likely. Does anyone know if I am hitting the wash rule if I take a loss on these and roll them into January contracts? I have the feeling I am. I'll go back and read that OCC tax document I guess.
HailMary
HailMary, I thing your position is overexposed to drops. I never did that for over a year.
Which is why I had an exit strategy. I am, however, going to go with my gut this time and take a risk. I'm not risking anything other than previously made profits.
If you missed my earlier trades...I made a ton of cash on writing puts over the last 2 years. I rolled some of that cash into 04 Jan 15 calls, and did very well (neary 3X gain). I took some of the profits from this and bought Jan 19 calls, and kept the rest as cash. So I have more cash than I did before buying any calls.
My predominant position is still shares value wise. I could sell now including losses on the Dec 17 puts and Jan 19 calls and walk away with >100% profit overall in a 2 year period.
I did overwrite myself. I will have to use all my saved cash on the Dec 17 put assignment. I made this write in haste. In retrospect I would have just held the shares and bought the calls and sat on it. I would have exited the shares at this point to lock in overall profit and let the calls run. Like I said though, I'm breaking my own rules this time.
Aggressive? Yes. But the stock can drop to $11 and I'll still make a profit overall (albeit a much smaller one at that point). If it hits $12, I'll be sorry, but I'll walk away. I think the fundamentals are strong enough to justify my position at this point.
HailMary
I probably should have rolled the Dec 17s at one point, but it is a little late to roll now that they are well in the money. My purchase price will be $16.25 so it isn't so bad. I think the stock will hit at least $20 early next year sometime, so I'll just hold for that. If it doesn't happen, I'll walk away with whatever I can get. The only downside is the assignment will have me dipping into a small amount of margin, but nowhere near enough to get me in any sort of trouble. Note that I will be writing covered calls on these shares as soon as I get them. This is one of the few times I use covered calls (over bought).
HailMary
Well it nearly hit my stop loss price ($15.50), but I'm going against my own rules, and I'm going to hold all my positions. I think the fundamentals are just too strong to hold the stock down across a longer time period. I hope my gut is right, or I'll kick myself for not following my own system. It will probably retreat back to lower support levels from here, and then start another long run up. Sgolds had a nice analysis on TA, where it might only retreat to the 50 day MA of $15.25 and hold there. TA is pretty valuable in this situation where no major new news has come out recently or is expected in the short term. We could always get a surprise news item though which could throw the stock in either direction.
my position:
long shares ($8.63 avg entry)
short Dec 17 puts (I'll take the assignment if it comes to that)
long Jan 19 calls (HailMary upside insurance)
HailMary
I was hunting for new drivers for a video card, and I ran across this:
http://www.nvidia.com/object/winxp64_52.14
Probably old news to some, but I found it good to see some support.
HailMary
Actually, the steeper the technical decline to support, the more likely there is enough time in the next two weeks for the price to rise above 18. I am hoping for a V bottom. Just as long as there are no nasty surprises along the way.
Yes a whipsaw down and back up is possible and likely. Trying to get in on one of these can be tricky unless you already have your order set.
HailMary
sgolds-
Are you looking for an entry in the $14 (or $12) range? I would agree it is likely to retreat to $14 short term, but it isn't a certainty. It won't take much fundamentally to trigger another run up. I've toyed with the idea of getting out and then back in on this likely dip, but that poses its own risks. The bottom line is I really want to be holding a long position going into next year, so I'm staying put despite my earlier ramblings of exit strategies. I think maybe you said you are holding some january calls?
HailMary
TA can only tell you where resistance points are and what a stock's momentum is. It cannot tell you if there is a true bottom and top, otherwise anyone could make a fortune using it with a few simple rules. That being said, I generally only go long (or write puts) when momentum is up, although I sometimes try to guess the bottom based on a TA resistance point when the momentum is still negative (like my purchase yesterday). This is more risky and often proves a suckers game. The safest time to go long is when momentum is up and an upward resistance point is not in sight. The safest sells are when momentum is down and the stock is near an upper resistance point. You will never buy at the bottom and sell at the top with this strategy though.
Overall, fundamentals are a lot more important. One significant news item can toss momentum and resistance points out the window. TA is a tool, not an answer. It will help to use it in the long run.
$16 ($16.50 really but the down market has skewed the graph) is a minor support level right now. If it can hold and rise back above $18 from here, $16 will become a strong support level going forward. If it breaks down, it is likely headed for lower support points ($14 or even $12). From all of these statements, there is no guaranteed outcome, just more probable ones.
If I wasn't long already I would probably wait a couple of weeks before going long. I don't want to hassle with a quick trade and tax implications, so I'm going to try to be patient and wait it out.
HailMary
Looking at the tax rules again, I can safely write in the money calls on my long term shares (the majority of them). If I bought the calls back for a loss though, I would have to count that as long term loss, and that loss would be deferred until the next tax year. I wouldn't do that anyway. I would let the shares get called away.
I have some short term shares. I would have to write qualified calls on those (> 30 days to expiration, no lower than 1 strike below current price), or I would face termination of the holding period. I'm coming up on 11 and 12 months on 2 batches so that wouldn't be too good. I guess if I was going to sell the shares anyway, it wouldn't matter.
I'm still anticipating January being a good month for the stock market in general, so I'll probably just ride this out. I'll be breaking my own rule about protecting a profit if AMD drops more from here. I hope I don't regret it.
HailMary
This stock is doing exactly what I predicted and exactly what I planned for.
Plans often go astray. I don't expect AMD to sit in this range for more than a week or two. I guess that is enough time for December options. Do you have a strategy if the stock retreats to say $12 or rises to say $22? Will you roll out so you don't get assigned or called away?
If it is going to go to $12, I would rather be on the sidelines with cash looking for other opportunities. I also want to have a play if it runs to $22. I think my best bet at this point is to lock in an overall profit with the shares, and hold the risky long calls. As I_banker pointed out though this would be a tax hit, and may not be worth it.
I guess I'll sit tight for now and contemplate my options over the weekend.
HailMary
Well it looks like AMD probably isn't going to test my $15.50 exit price today. I'm glad as I would have had to make some tough choices. I need a few days to contemplate what I want to do long term. I'm not certain I want to hold AMD past sometime in Q1. I'm concerned about Prescott and the 90nm transition. I don't really want to exit now, but I also don't want to kiss a healthy profit goodbye after all this time holding the stock.
Anyone here planning a similar exit in Q1?
HailMary
HailMary, why don't you write calls instead of bailing out?
I suppose that is an option I hadn't considered. Generally if I'm going to continue to hold a stock, I would rather get the full risk/reward ratio. Writing calls keeps nearly the same risk and caps the reward. I guess the risk is acceptable as it is highly unlikely AMD is going to return to single digits. It is more likely that I could write calls month after month until the shares are called away, and end up with a much better exit price. Or I may even decide to hold the shares if some of the unknowns (Prescott, 90nm transition) work out to AMD's favor.
Thanks for the idea. I might use it tomorrow if it heads below my exit price. I simply hope it doesn't come to that. I would rather see the strength and run upwards continue.
HailMary
p.s.
The chart for the last few weeks looks a lot like the chart from september.
Sept 1st ~$11.0
Sept 9th ~$12.5
Sept 14th ~$11.0
Sept 21st ~$12.5
Sept 30th ~$11.0
It bounced twice over 2 week periods with a 12% drop each time. After Sept 30th it went on a huge 50% runup.
Nov 9th ~$16.5
Nov 15th ~$18.5
Nov 21st ~$16.5
Dec 1st ~$18.5
Dec 5th ~$16.5
Two bounces of a 11% drop.
I hope it repeats september's chart. It is going to resolve one way or the other. It is probably worth betting on that it is not going to sit at the current level of $16.50 (a strangle comes to mind). I would buy some puts here, but I can't. :(
HailMary
should be watched closely the next few trading sessions.
I agree here. From a TA standpoint, AMD is at a critical point on the chart. If it pulls back much more from here ($15.50 in my book), the bottom will likely fall out and return to $14 or even $12 if there is enough downward momentum (high volume selloff), and it will probably be a long time before we would see 52 week highs again. I'll be watching like a hawk the next few days, because I will exit at $15 or so in case this happens. If AMD stock, however, can weather the current downtrend (stay at or above $16) for a few trading sessions, it will be a strong indicator (3 successful tests of a $16.00-$16.50 lower bound).
TA isn't the whole picture though, and obviously you can't predict anything from this since you have to see what it does first. TA will show you momentum shifts, and you can usually time sells and buys from it. I would feel more comfortable holding for a couple more months if it stays above $16.
There is a lot of risk in the chart short term. It can go either way at this point. I've already made a bet that it will rebound and move higher, but I won't be surprised if I have to utilize my exit strategy instead.
HailMary
AMD held up pretty well today on the selloff. Lots of volume and a reversal, but I'll still be running for the exit if it crosses $15 and say adios to you all for a while. I hope it doesn't come to that as it has been an enjoyable ride from the single digits. If I do exit I'll probably hold the Jan 19 calls as they'll be mostly worthless at that point anyway. At $15, I'll walk away with about a 60% return overall from AMD over a 2 year period. Not spectacular given that AMD has run from $4 to $18, but it is still a profit.
Perhaps I am being too cautious and I should weather the short term downtrend, but I have learned it is always best to take a profit and run instead of chasing a stock downward. I also believe AMD faces some large risks in 04 (Intel's roadmap, 90nm transition), and I don't want to be left holding the bag. If those unknown variables work out to AMD's favor I would look for a reentry (via put writing). If they don't I may switch to Intel as an investment vehicle or just leave this segment alone. It could end up in a draw where both companies are stagnant. That may even be the most likely situation, which would be too bad because there aren't too many stock plays out there like this.
HailMary
What do you think?
I think if it hits $12, I would probably not want to be long the stock anymore, as it would likely indicate some real negative material event.
If it passes below $15.50 or maybe $15 (I'm willing to stretch a little), I'll exit AMD completely with a very good overall profit.
I think the sector turnaround is real. I don't want to be sitting on he sidelines if a large run-up happens. If I'm wrong, I'll take my short term lumps.
HailMary
Have you found a cheaper broker? 100 contracts $139.
Nope. I just paid $198 for 100 contracts at e*trade. :(
I'll look around more in January. That is when I plan to switch brokers.
HailMary
Looks like it may be another buying opportunity!
Yeap. I just doubled up on Jan 19 calls for the longshot HailMary! :)
I'm sure I'll regret it, but I'm in the gambling mood, and I have cash burning a hole in my pocket. Disclaimer: I do not recommend this kind of trade to others. It is not wise at all, but it could be fun.
position now:
Long AMD shares
Long Jan 19 calls (2X previous amount)
Short Dec 17 puts
This is it for me. I will not risk going any longer on AMD.
HailMary
I will not respond further to this thread because it is simply an attempt at spreading nonsense.
I had previously believed the o/s could interface with legacy 32 bit drivers, and I was wrong. I'm pretty sure I wasn't the only one confused on this issue, or maybe I was?
Like many have pointed out it is not a huge deal, unless you have some old devices that don't yet have 64 bit drivers. I would think this may be an issue for gamers who have a plethora of USB game controllers that each have custom drivers in windows. I'm a hobbyist musician myself, and I have a multiport MIDI interface that is a USB device. It has a special windows driver. Is it going to work in Windows 64? I'm not really sure.
Some of my USB devices, like my logitech mouse, use a standard windows driver, so I know those are safe, but others seem to use their own.
HailMary
I did a google search and came up with this:
http://www.amd.com/us-en/assets/content_type/DownloadableAssets/AMD_TechEdEMEA2003_Final.pdf
See pages 19 and 21.
All device drivers must be 64-bit. Libraries only need to be 64 bit if a 64 bit app needs to use them. So it looks like Windows 64 is going to contain both 32 and 64 bit dlls, which is a good thing. I guess the 32 bit dlls are executed through the wow64 mechanism as well.
I guess I should have read a little before my initial post. Ah well everyone sticks their foot in their mouth occasionally. :)
HailMary
This is not what I am hearing from my sources. They tell me that a x86-64bit OS requires all drivers to be 64-bit.
Yes. I think I was maybe mistaken. I have a full set of AMD64 manuals on my shelf. I'm going to browse them to see if there is any information in there, but I'm thinking MSFT has the official word on this. I don't have my MSDN subscription anymore, so it might be hard to find an answer.
In any case the requirement for full 64 bit drivers will be a problem for those wanting to use older devices on a new machine.
HailMary
A 32/64 hybrid OS is going to have 2 sets of drivers and libraries - legacy 32 bit and the new 64 bit.
Hmmm...I see I am may be wrong on this subject (at least for the driver side). I just did some web searching and read in a few places that 64 bit drivers are REQUIRED. That does put a major damper on things....
Sorry for the incorrect information.
HailMary
You are partially correct. A 64 bit OS is necessary for running 64 bit apps for many reasons (o/s needs to know memory mapping, registers for state saving, switching processor modes, etc.). And 64 bit drivers and libraries will be necessary for these 64 bit apps as well.
All the 32 bit apps, however, will continue to use the legacy 32 bit drivers.
A 32/64 hybrid OS is going to have 2 sets of drivers and libraries - legacy 32 bit and the new 64 bit.
So MSFT could release a 64 bit o/s today with limited 64 bit drivers and libraries (essentially what the beta is now), and it would run all existing 32 bit apps with the current 32 bit drivers. The problem comes in with the new 64 bit apps not having all the needed 64 drivers and libraries ported. They can't use the 32 bit drivers and libraries.
edit - looks like I'm wrong about the drivers as I posted 2 messages down
HailMary
You'll probably get extreme arguments both ways on this board. Hyperthreading is Intel's marketing name for SMT (simultaneous multithreading). It allows the processor to act as 2 processors, but the catch is they share 1 physical core processor. One thread will almost never utilize all of the execution power of a single core, and SMT allows a second thread to try to get some of that waste back. There is a small overhead inherent in SMT designs for doing this, so in some cases there is more waste than a traditional core. This is not a new invention. AMD could use it if they chose too, but they have commented in the past that they don't think SMT is worth the tradeoffs to implement it. This may be true for them. SMT has different levels of benefit depending on the core. For AMD cores it may not help at all, while on the Intel cores it does. The P4 that is out now has Hyperthreading enabled, and you can go look around at reviews to see how much of a difference it makes (it is not a giant leap). The new Prescott core is rumored to have an improved SMT implementation, so that may change. AMD should probably implement this though, because it is possible to write software that runs better on an SMT processor than it does on a non-SMT processor. This will likely be flaunted in future benchmarks (and probably already is in some current benchmarks).
HailMary
I agree that servers should be benchmarked as they are sold, rather than as they can be tweaked.
Does anyone know what system Ace's started with? Perhaps they are getting pre-release hardware, in which case I think tweaking is fair game, although the results are going to hold little value other than showing what is maybe possible. If this is hardware that is released and being sold now, then I agree it should be tested as is. Probably the best thing is for Ace's to wait until this platform has had a few rounds of official release before testing. I'll wait for the official review to draw my own conclusions.
HailMary
Please caution me often!
Just remember writing puts is high risk/low return if you are using margin. If all the stocks you wrote against were to drop suddenly by 30%, would you be in trouble? I use margin myself at times, but if I do, I try to cover it quickly or buy a few cheap protecting puts at a much lower strike to limit exposure to catastrophe.
HailMary
or have too much margin.
Words to live (or die) by. I know I don't need to caution you since you are an experienced investor.
HailMary
You might want to look at GE. Jan $27.5s fetch $0.50.
Nice find. I'll be ready to broaden my put writes among more stocks soon. I'm looking to exit a number of positions (not AMD) to free up more cash. I will also eventually lighten up on AMD (probably sometime in Q1). I'll be looking for some new plays then.
HailMary