Like most technology stocks over the last eight weeks, Advanced Micro Devices (AMD) - Get Report hasn't been having the best time.

Although let's call it what it is: AMD stock was way too hot coming into the fourth quarter. Shares had hit a low of roughly $9 in May and topped out near $34 in September. Not that AMD isn't a good company or that CEO Lisa Su hasn't done a tremendous job leading the charge, but a near-tripling in a matter of months?

Too much, too fast.

This is particularly true as demand for cryptocurrency mining was in decline. It didn't matter that AMD or Nvidia (NVDA) - Get Report were producing crypto-specific GPUs, as miners would use the companies' other GPUs as well. This made it seem like, once demand for crypto-specific GPUs died down, that demand for other GPUs would still be OK. This was untrue, causing a major build in inventories, while inflated demand gave management and investors a false sense of future revenue. This issue became more well-known once AMD and Nvidia reported their most recent earnings results.

While AMD had already paid a steep earnings-related price in mid-October -- falling from $23 to $19 in one day -- it was constructive to see its price action following the earnings-related bludgeoning that Nvidia took a month later.

In fact, shares have been trading better and better since AMD's quarterly results. So let's circle back to the stock and see if it's a worthwhile long.

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Trading AMD Stock

The first thing I look for on a stock is its risk, then I map out the reward. That's one reason you don't hear many investors asking, "what's the reward/risk." It's "risk/reward" for a reason and that's because it's more important to protect ourselves than chase potential winners.

In any regard, we have an attractive risk/reward with AMD stock.

Shares recently bounced off the 200-day moving average. In doing so, it not only kept that level of support intact, but also put in a higher low. That can be seen in our short-term uptrend (blue line). Further, the stock has recently gotten above the 21-day moving average and downtrend resistance (black line). For the last few sessions, shares have pulled back, but each time these two marks have held as support.

With that, short-term traders have a defined risk, while upside to the $23 to $24 area is possible. As is usually the case, it's best to keep it simple. 

Of course, any trade talk from the G-20 Summit can swing AMD (and the market) in a different direction. But all things considered, AMD looks pretty good right here.

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