Trading Strategies For Advanced Micro Devices Stock Before And After Q1 Earnings

Advanced Micro Devices, Inc AMD was edging slightly lower Tuesday ahead of its first-quarter earnings print set to take place after the market close on Tuesday. 

When AMD printed its fourth-quarter results on Jan. 31, the stock surged 17.51% over the two trading days that followed. 

For the fourth quarter, AMD reported earnings of 69 cents per share on revenues of $5.6 billion. The company beat the EPS estimate of 67 cents on revenues of $5.5 billion. 

For the fourth quarter, analysts, on average, estimate AMD will report earnings per share of $0.56 on revenues of $5.3 billion. Read more here...

On Monday, Rosenblatt analyst Hans Mosesmann reiterated a Buy rating on AMD and maintained a $200 price target. Morgan Stanley analyst Stephen Moore also weighed in on the stock, maintaining an Overweight rating and bumping the price target up from $87 to $102. 

From a technical analysis perspective, AMD’s stock looks bullish heading into the event, having settled into a possible bull flag pattern on the daily chart. 

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat. 

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The AMD Chart: AMD broke up from a falling channel pattern on Friday and on Monday, the bulls attempted to drive the stock higher but failed and AMD closed that day flat. On Tuesday, AMD was consolidating on lower-than-average volume as the stock heads into its earnings print. 

• The bounce up from the lower descending trend line of the channel and the break up through the pattern, paired with the consolidation, had AMD forming a possible bull flag pattern. If the pattern is recognized and AMD receives a bullish reaction to the news, the measured move is about 8%, which suggests AMD could rise toward $95. 
• Bearish traders want to see AMD suffer a bearish reaction to the print, which could force the stock back down into the channel formation. If that happens, the upper descending trend line could continue to push AMD lower to eventually back-test the 200-day simple moving average as support. 
• AMD has resistance above at $92.75 and $99.82 and support below at $87.45 and $84.24. 

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