Can Advanced Micro Devices Bust Up Through This Pattern? A Technical Analysis

Advanced Micro Devices Inc AMD is trading higher on Wednesday. The stock has been trending in the r/WallStreetBets community with about 44 mentions.

Rising bond yields have weighed on growth stocks recently, and although AMD has held up fairly well through overall market turbulence the stock lacks bullish volume.

See Also: Is Advanced Micro Devices Stock a Good Buy?

The AMD Chart: AMD’s stock fell into a falling wedge pattern on the daily chart after making an Aug. 4 all-time high of $122.49. The stock has tested the bottom of the wedge twice and the top on three separate occasions, giving the pattern validity.

Within the wedge AMD created a bullish double bottom pattern on Sept. 29 and Aug. 4 when it bounced from the $99.81 level. Due to the double bottom pattern, AMD has failed to make a lower low, which may indicate the former downtrend is over.

On Wednesday AMD was working on printing a bullish engulfing candlestick pattern, which may indicate higher prices will come on Thursday. Bulls would like to see AMD break above Tuesday’s high of $102.87 for more confidence a new uptrend may be in the works.

In order to make the move higher, AMD will need to regain the eight-day exponential moving average (EMA) as support, which is currently acting as resistance. The eight-day EMA is also trending below the 21-day, which is bearish for the short term. The 200-day simple moving average is trending about 12% below AMD’s share price, however, which indicates overall sentiment is bullish.

• Bulls want to see big bullish volume come in and pop AMD up above the EMAs, which would help the stock regain a resistance level at $103.83. If the stock can make the level support once again, it could break up bullishly through the falling wedge and make a run for the $107.65 level.
• Bears want to see AMD continue to reject the eight-day EMA and for bearish volume to drop it below the $99.81 level to negate the double bottom pattern. Below the level there is support at both the $99.23 mark and at the descending trendline of the wedge pattern.