AMD Is Nearing The End Of A Pennant Pattern: What's Next?

Advanced Micro Devices Inc. AMD shares ticked higher Thursday after a report came out that the company is ready to make ARM chips.

AMD closed up 0.59% at $106.22. The stock looks to be trading in a technical pattern and could be ready for a big move soon.

AMD Daily Chart Analysis

• The stock looks to be nearing the end of what technical traders call a pennant pattern, and possibly ready to break support or resistance soon and see a push.
• After being condensed between narrowing highs and lows, the stock doesn't have much room to move. A break past either the pattern support or resistance could signal that a further move in that same direction is coming.
• The stock trades above both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock is seeing bullish sentiment.
• Each of these moving averages may hold as a possible area of support in the future.
• The Relative Strength Index (RSI) has cooled off the past few days and leveled out to 50. This shows there are now relatively equal buyers and sellers in the stock.

What’s Next For AMD?

Bullish traders are looking to see the stock break above pattern resistance on above-average volume and push higher. Bulls are then looking for a nice upward move and some consolidation while the stock holds its gains.

Bearish traders are looking to see the stock drop out of the bottom of the pattern and start pushing lower. Bears are also looking to see the stock cross below the moving averages for a possible change in sentiment.