AMD Earnings Will Break or Boost the Stock's Bullish Chart

Advanced Micro Devices continues to make bullish move after bullish move. Earnings will either strengthen that trend or demolish it.
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Advanced Micro Devices  (AMD) - Get Report got off a strong start this week but has since faded a bit from its Monday morning high.

Shares have risen about 1.5% on the day as investors gear up for the company’s earnings report after the close of trading on Tuesday.

The report comes after Intel  (INTC) - Get Report reported earnings last week. While the market initially sold the stock lower, Intel shares were able to recoup all of those losses before the close on Friday, ending higher by 37 basis points.

Will AMD have a similar reaction? There’s no way to say with any certainty, particularly at a time with both volatility and uncertainty quite high.

Don’t forget, Nvidia  (NVDA) - Get Report could also be a mover off the report, as the chip stocks can trade together from time to time. With that in mind, let’s look at the charts.

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Trading AMD Stock

Daily chart of AMD stock.

Daily chart of AMD stock.

Known for its big moves and tendency to follow the technicals, Advanced Micro Devices is a top stock pick among traders.

Like most of the market, shares came under immense pressure in March. However, AMD bottomed a few days before the broader stock market, breaking out of its falling wedge (blue lines).

This was a bullish development and came after a test of the 200-day moving average. That give investors confidence in the long setup.

The early pullback to $42 in April was bought, as AMD stock quickly reclaimed the 50-day moving average that acted as resistance in late March.

After pushing through $52, shares have been bubbling below the $57.50 to $58 area, as rising uptrend support continues to squeeze AMD higher. That’s allowing a series of higher lows to form, a bullish technical development.

Unfortunately, we are nearly out of time to let the technicals play out on their own. With earnings due up on Tuesday, that event will set the tone. It will either driver a breakout over $58 and likely trigger a move to all-time highs or it will cause a breakdown below rising uptrend support.

If it’s the former and we get a breakout over $58, it’s vital that AMD stock closes over this mark. If it can, it puts $60-plus in play and allows bulls to maintain control.

Like Intel demonstrated, support can temporarily break as long as it's recovered quickly. However, if AMD instead breaks below uptrend support and fails to close back above it, more downside can ensue. 

Specifically, I’m watching $52 and the 20-day moving average, followed by the 50-day moving average near $48.50. Just below, at $47.70, is the 50% retracement from the March low to the April high.

Let's see if AMD can deliver what the bulls need.