Advanced Micro Devices Looks To Consolidate Following 19% Surge: Where To Watch For A Possible Entry

Advanced Micro Devices, Inc AMD was trading slightly higher on Thursday after closing Wednesday’s session up 2%.

Shares of the chipmaker are up almost 19% since May 4, after breaking bullishly from a falling channel pattern on the daily chart, which often signals a longer-term reversal to the upside is on the horizon.

On June 19, AMD will showcase its expanded portfolio aimed at AI and datacenter technology and share its growth strategy at a live stream event. Since posting a first-quarter earnings beat on May 2, AMD has seen high levels of trading volume, indicating an increased level of interest from traders and investors, which is bullish.

While AMD negated its downtrend within the falling channel, the stock hasn’t yet retraced significantly to print at least a higher low to confirm a new uptrend. When that happens, bullish traders who aren’t already in a position can watch for a possible entry.

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The AMD Chart: On Wednesday, AMD formed a shooting star candlestick, which suggests the stock could trade lower on Thursday. The second most likely scenario is that AMD trades sideways and prints an inside bar pattern to consolidate the recent upward momentum.

• Traders and investors can watch for AMD to break up or down from Wednesday’s trading range on higher-than-average volume later on Thursday or on Friday to gauge future direction. If AMD breaks down from the pattern, bullish traders can watch for the stock to eventually form a possible doji or hammer candlestick, to indicate the higher low has occurred, and the uptrend will continue.
• A pullback is likely to come over the next few days because AMD has become detached from the eight-day and 21-day exponential moving averages. When the pullback occurs, the stock may back-test and reverse higher from those indicators.
• AMD has resistance above at $99.82 and $106.99 and support below at $92.75 and $87.45.

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