The stock rose 3.2% 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?
Check out TheStreet’s live blog of AMD's earnings on Tuesday after the close.
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) - Get Intel Corporation Report is struggling against AMD and Nvidia (NVDA) - Get NVIDIA Corporation Report, 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 few days. However, we’ll need more than that if we’re going to see a move to new all-time highs.
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 around $86 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.