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Can AMD Go on a Rally Like Nvidia and Hit All-Time Highs?

AMD is breaking out to multi-month highs and clearing range resistance. Can it go on a run like Nvidia has over the last few months?

First it was Nvidia  (NVDA) - Get NVIDIA Corporation Report that enjoyed the big gains. It it now Advanced Micro Devices’  (AMD) - Get Advanced Micro Devices, Inc. Report turn?

Shares have risen about 3.5% on Tuesday as the stock is hitting its highest levels since February.

The stock was flirting with a move over range resistance on Monday, but is really pushing higher on Tuesday. The rally comes on positive reports regarding U.K. regulators and AMD’s acquisition of Xilinx  (XLNX) - Get Xilinx, Inc. (XLNX) Report.

For its part, Xilinx shares are also hitting the highest levels since February.

Nvidia and the VanEck Semiconductor ETF  (SMH) - Get VanEck Vectors Semiconductor ETF Report both hit new highs this week. With AMD stock continuing to consolidate and now making progress on its $35 billion acquisition, can it too break out to new highs?

Let’s look at the chart.

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Trading AMD

Weekly chart of AMD stock.

Weekly chart of AMD stock.

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In July 2020, AMD stock exploded over $60 resistance, quickly climbing to a high of $87.29 in just a couple of weeks.

After that, the stock settled down, bouncing between $74 and $88. Eventually, AMD broke out to a new range, with $88 acting as support instead of resistance, and the $94 to $96 area acting as resistance.

Interestingly, support eventually gave way and AMD fell back into prior trading range.

As I mentioned in the opening part of the story, AMD is breaking out over $87 to $88 range resistance again as the stock is pushing to multi-month highs. It’s also pushing through the 61.8% retracement.

From here, bulls are looking for the $87 to $88 area to again turn from resistance into support. If that happens, the $94 to $96 area is certainly within reach.

If AMD can push through that zone, look for a test of the all-time high at $99.13 and then $100 above that.

Should shares really get moving - like Nvidia did - then the $115 level could be in play near the 161.8% extension.

On the downside, a move back below $87 needs to be met by support from the 50-day moving average. Otherwise, $80 could be on the table.