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Shares of Advanced Micro Devices (AMD - Get Report) were set for modest gains in Wednesday's trading session, up about 5% in pre-market trading, but flat by afternoon.

The rally was a reaction to the company's quarterly results. Earnings of 5 cents per share were slightly ahead of expectations, while revenue of $1.27 billion squeaked by analysts' expectations by $10 million despite falling 23% year-over-year. It helps that management's revenue outlook for next quarter is roughly in-line with expectations.

All that said, AMD stock stumbled out of the gate, falling back to break-even in early trading. Shares momentarily went into negative territory before bouncing slightly higher. Shares ended the day down almost 3% to $26.81.

Despite the volatile action in AMD, Nvidia (NVDA - Get Report) is seeing a nice boost on the day, up about 1%.

Nvidia is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells NVDA? Learn more now.

Trading AMD Stock

One-year daily chart of AMD stock.
One-year daily chart of AMD stock.

The reaction to AMD's earnings are more relief than outright bullish enthusiasm. That comes after Intel's (INTC - Get Report)  disappointing quarter in which shares have since been hammered.

So where does that leave AMD stock now?

Like Intel, AMD is well off its highs. However, unlike Intel, AMD's highs are from back in the third quarter of 2018 and shares continue to trade well in the short term despite the lackluster reaction to earnings.

Should AMD stock finish the trading session at or above current levels, it will have stayed above its 20-day moving average after testing that mark for the fifth straight session. That would be constructive news for the bulls, who are now trying to figure out how to trade Advanced Micro Devices.

Since the start of 2019, AMD stock has made a series of rallies and consolidations. In short, shares have been spiking up and then chopping sideways before again spiking higher and repeating the process. Sometimes the consolidation would last weeks, like the one from late-January until mid-March. Other times it would last just a week or two, like in late-March, before the next leg higher.

Even with earnings, AMD stock is still in that pattern, highlighted on the chart with its purple lines. Aggressive bulls can go long AMD using the 20-day as their guide. A break below $27, though, should be considered as a stop-loss -- and may even possibly be used as an entry for short-sellers -- as the odds increase for fall to the 50-day moving average.

Near $25.31 is the 38.2% Fibonacci retracement for the 52-week range, while the $25 to $25.25 area has been significant over the past year as well. Conservative bulls could consider buying AMD stock on a pullback between this area and the 50-day moving average. Otherwise, a breakout over $29 is possible.

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.