Advanced Micro Devices Inc. (AMD)  chart shows when a really is coming.

The stock is having an active week -- shares are up almost 8% in the last week, buoyed by news that the firm is partnering with semiconductor behemoth Intel Corp. (INTC) on graphics chips in a bid to take on fast-growing rival Nvidia Corp. (NVDA) .

While AMD charged higher at the start of this week on the news, shares are giving back some of that upside, down around 3.6% Wednesday afternoon.

That sort of volatile "two steps forward, one step back" price action is nothing new for AMD; this stock offers a lot more volatility than the rest of the S&P 500. And for the most part, that's been a very good thing for shareholders in recent years as AMD has charged higher amid growing demand for its chips.

This year has looked a whole lot more choppy and a lot less directional for AMD shareholders. In fact, AMD is only up 2.7% year-to-date, effectively breakeven for a stock that trades as actively as AMD. That's some pretty notable underperformance in 2017 -- that's the bad news.

The good news is, the recent sideways slump in AMD isn't the major red flag that it may appear to be, at first glance. In fact, shares are setting themselves up for a major bullish move in the long term.

To decipher the price action, we're turning to the charts for a technical look.

First, 2017's price action:

The sideways chop in AMD is pretty unmistakable, but two long-term trend lines have been in play all year long: Horizontal resistance at $15.50, and uptrending support connecting all the major swing lows this year. That combination forms an ascending triangle, a bullish continuation pattern that signals higher ground ahead.

For a little context about what trend that price pattern is signaling a continuation in, we need to zoom out to the long-term chart:

On the weekly chart of AMD above, the picture gets a lot clearer -- and the ascending triangle pattern forming in shares this year looks a lot more "textbook". Shares started forming the ascending triangle pattern after essentially rallying nonstop in 2016. A breakout above $15.50 resistance is a signal that we're likely to see another rally leg.

That upside potential jives with the fundamentally fueled rallies we've seen in other chip-makers this year. Nvidia has already nearly doubled year-to-date, and even giant Intel is up nearly 30%.

Here's the bottom line: If AMD can catch a bid above $15.50, we've got a pretty clear signal that buyers are back in control and that shares are likely to head higher from here.

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

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