Replies to post #19590 on Advanced Micro Devices Inc (AMD)

[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

[dougSF30]

YB, yes, the chances of AMD eventually having a down day are pretty good. :) OTOH, a forecast that AMD *must* return to a particular price is nonsense. It *might* go down to $16, but it also *might* run up to $24. No one can say, for sure.

Doug

[sgolds]

yourbankruptcy, on those resistance levels -

Thank you for remembering my post! However, I should point out that that post made some assumptions and was illustrative. (You can't make a real calculation until you have a clear top.) I'll give a more accurate presentation here now that the stock put in that top. First, let's have a look at the chart:

http://stockcharts.com/gallery?AMD

The top chart gives daily information and the bottom one weekly information. (The simple chart I showed last week did not give the daily information, and an important data point was obliterated.)

Note the dip from 12.87 to 10.52 in September. The weekly chart on the bottom shows that in June the stock had a low of 5.80. The rise from 5.80 to 12.87 is 7.07 points, and the following dip was 2.35 points. That is a 33.24% decline, which shows 10.52 hit the 33% retracement point. Resistance held at that point and the stock then resumed upward movement.

(Recall that the bullish resistance points during retracement are 33%, 50% and 67%. When a stock bounces off the 33% retracement that is considered very bullish.)

OK, this establishes 10.52 as the baseline for the next leg up. The stock then went up to 18.50, a 7.98 point increase. This means the actual resistance points for the current correction are as follows:

33%: 18.50 - 1/3(7.98) = 15.84
50%: 18.50 - 1/2(7.98) = 14.51
67%: 18.50 - 2/3(7.98) = 13.18
100%: 10.52

Note that this is based on closing prices (quick intraday spikes don't count), and the calculated resistance points are approximate - they can be off a few cents in either direction. So the resistance areas are the high 15s, mid 14s and low 13s. (Resistance is considered broken if the price falls significantly beyond the calculated points, and the stock will usually continue falling to the next resistance point. On a volitile stock like this, 5% is considered significant.)

I hope this is helpful! Before using these numbers, one should verify my calculations.