Advanced Micro Devices Inc (AMD)

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Can Earnings Send Advanced Micro Devices (AMD) to New Highs?
By: TheStreet | April 26, 2021

• Business is humming for Advanced Micro Devices but the stock has been struggling for direction. Will earnings finally propel it higher? Let's look at the chart.

Advanced Micro Devices (AMD) has been struggling for direction over the last few months, although shares have been trading better over the past few days.

The stock was up about 3% on Monday after gaining 4.7% on Friday. With earnings set for Tuesday after the stock market closes - amid a busy week for earnings - can AMD finally get the push it needs to new highs?

There has been a huge shortage of semiconductors over the last few months, yet it’s expected that AMD has continued to do quite well.

It’s clear that Intel (INTC) is struggling against AMD and Nvidia (NVDA), the latter of which recently had an impressive rally to new highs after its GTC conference.

Bulls are optimistic that AMD is also enjoying a solid quarter, indicative of the rally over the last two days. However, we’ll need more than that if we’re going to see a move to new all-time highs.

Trading AMD


Daily chart of AMD stock.

Chart courtesy of TrendSpider.com

It’s not rare for AMD stock to trade within a range for several months or even several quarters, then eventually burst higher. For a while, the stock was stuck between $74 and $88, eventually breaking out over resistance in December.

Shares ran to $99.12 before topping out and retreating. For a while, prior resistance acted as support, with the stock bouncing from $88.

However, that level eventually failed as tech stocks were under heavy selling pressure. For prudent observers though, they’ll notice that prior range support again held firm, as AMD bottomed near $74.

Back near $85 now and the company’s earnings report is likely a make-or-break catalyst in terms of the current range.

AMD stock is now back above all of its major moving averages, with the exception of the 100-day moving average, which is near range resistance.

On a bullish reaction, we need to see a close above the $87.50 to $88 area. Even better would be a close above $90 and the 61.8% retracement.

A gap-up into this area that fades back below $87 is not constructive, as it only further cements AMD into the current trading range.

However, a move over $90 opens the door back up toward the current high near $99, then $100-plus. That’s what I’m looking for after AMD reports earnings.

On the downside, look for a decline to the 50-week moving average. While this measure has been support, a close below it puts range support near $74 back in play.

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