Chart Advisor: Examining AMD’s Rapid Rise

Articles From: Investopedia
Website: Investopedia

By Paul Kornfeld, CFA

1/ Advanced Micro Devices Keeps Rising Up the Rankings

2/ Candlestick AMD Chart Rallies Up Off Successful Support Test

3/ Point and Figure AMD Chart Approaches a Potential Key Resistance Level

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1/ Advanced Micro Devices Keeps Rising Up the Rankings

After struggling relative to its peers through the summer, Advanced Micro Devices Inc.* (AMD) has rapidly climbed back up the relative strength rankings in the SIA S&P 100 Index Report. It exited the red Unfavored zone at the end of October, and by mid-November, it returned to the green Favored zone for the first time since July.

Currently, AMD is in 8th place, up 20 spots in the last month with the shares up 13.1%, compared with a 4.3% return for the corresponding index over the same time frame.

2/ Candlestick AMD Chart Rallies Up Off Successful Support Test

Since bottoming out a year ago, Advanced Micro Devices Inc.* (AMD) has been under renewed accumulation, establishing a new uptrend of higher lows. A summer correction was contained by an uptrend support line near $95.00 back in October. Since then, advances have resumed with the shares trading higher or nearly flat for the last six weeks.

Coming off of two weeks of consolidation near $120.00, the shares have broken out over $125.00 and are approaching $130.00 resistance. A close above that level would complete a bullish ascending triangle pattern and signal the start of a new up-leg. Should that occur, next potential resistance may appear near $165.00, where a measured move converges with the late 2021 peak. Initial support appears at the 10-week moving average near $113.40. 

3/ Point and Figure AMD Chart Approaches a Potential Key Resistance Level

Back in October, a summer downswing in Advanced Micro Devices Inc.* (AMD) bottomed out in a bear trap where they broke down by one row, then quickly rebounded. Since then, the shares have not looked back, climbing 15 rows or about 30% without even a 3-box correction. Along the way, AMD has snapped a downtrend line and completed bullish Double Top, Spread Double Top and Spread Triple Top breakouts.

Currently AMD is bumping up against its June high. A breakout close above $129.35 would confirm the start of a new advance. Should that occur, next potential resistance tests on trend may appear near $134.55, where a horizonal count and previous low converge, then $151.55 and $164.05 based on previous X column highs. Initial support appears near $117.15 based on a 3-box reversal. 

With a perfect SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 10 out of 10, AMD is exhibiting short-term strength across the asset classes.

Originally posted 8th December 2023

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