Advanced Micro Devices (AMD) launched a cornucopia of buzzwords yesterday. Self-driving cars and artificial intelligence combined with a Tesla (TSLA) deal. The issue at hand is the validity of any deal. Neither company has commented and AMD partner GlobalFoundries said it isn't working on a chip for Tesla's self-driving cars.

When rumors like this hit and a stock reacts, like AMD's push from around $13.10 late yesterday to $14.25 this morning, I find it is more helpful to examine a slightly longer timeframe in terms of the charts. Rather than daily charts, I'll turn to the weekly view, especially since we don't have any confirmation this partnership exists.

Rather than draw out the conclusion, I'll start with it. AMD isn't a buy here for me. It's not a short either.

We have two clear prices to watch and a secondary on the upside. My focus is this large ascending triangle dating back to March. Steadily rising support, higher lows, places a target on $12.60. Should AMD hit $12.60, but not close under that level, traders could buy a bounce from that area and use something like $12.45 as a stop. If $12.60 fails, then I would anticipate AMD breaking below $12.00 in short fashion.

On the upside, we should continue to expect resistance around $14.50. If I'm a buyer on a bounce off of $12.60, then I'm a seller into $14.50, maybe a dime below. Should AMD break above $14.50, then $15.60 becomes the short-term target and an area of strong resistance.

Above $15.50 and AMD should be off to the races as there is no technical resistance unless you want to trace back price action over a decade. That has even less validity than yesterday's rumor.

My only action here is taking no action. Watching and waiting for a breakout or breakdown appears to offer the best risk-reward rather than buying rumors or chasing shares.

(This article originally appeared on Real Money, our premium site for active traders. Click here to get great columns like this from Tim Collins, Jim Cramer and other writers even earlier in the trading day.)

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At the time of publication, Collins had no positions in the securities mentioned.

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