Expert: This Stock Is The Best Swing Trade of 2016

Advaced Micro Devices, Inc. AMD shares are surging 10.7 percent on Monday as the stock pushes to a fresh 52-week high. Option trader Sang Lucci tweeted that AMD has been his favorite swing trade of 2016.


 

Day trading is typically classified as traders who buy and sell stocks and options within a single trading session. Swing trades, on the other hand, typically last anywhere between two days and two weeks.

According to Lucci, AMD’s pattern of periods of sideways consolidation followed by big breakouts to new highs has been a consistent and profitable pattern during the stock’s run-up from below $2 in February to its new highs above $6.50.

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Prior to Friday’s breakout and Monday’s surge in upward momentum, AMD had been trading between $4.50 and $5.50 for a little over a month. The stock logged similar consolidation periods followed by high-volume bullish breakouts in April, May and June.



If the last breakout is any indication, Monday’s highs may be the end of the current breakout’s rally. Monday’s high represents roughly an 18.5 percent gain over the stock’s June high of $5.52.

If the pattern holds, traders should look for at least a couple of weeks of consolidation between $6.50 and $5.50 before AMD is primed to make another push higher.

Disclosure: the author holds no position in the stocks mentioned.