Stock has gone up 55% in five weeks. It is now above most analyst's targets, so either they raise their estimates -- not likely -- or you trade it defensively.
See all those red and green vertical lines in the chart below? Those are all Buy and Sell signals. Those are all based on candlestick patterns, not moving averages -- that makes the Buy/Sell signals come faster. The last Sell signal was two days ago.
Not that you cannot trade AMD when it is trading flat, like the last few days on that chart or the days prior to the big rise higher. I've been doing that for quite a while -- using a defensive approach.
A defensive approach is to wait for a buy signal derived from a candlestick pattern then buy the stock then immediately sell Covered Calls (CCs) that expire on the coming Friday. That's what I was doing during all those weeks when AMD was trading roughly flat. You'll often find that you can trade in and out of those CCs multiple times during the same week, and thus increase your weekly profit from that side actvity.
Another defensive approach -- for those who don't yet own the stock -- is to hold cash and sell weekly Puts at lower prices. If you are not put the stock at expiration, at least you generated weekly income. If you are put the stock, at least you got it at a lower price than you would have paid to buy the stock outright on the day you sold the Puts.
If during the coming days, the stock should drop by 50% of its most recent run -- for instance back to $22.50 -- then change from defense to offense. In other words, don't sell CCs anymore; or price them so high that it is very unlikely that your stock will be assigned.
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