Advanced Micro Devices Drops Near Key Bull, Bear Cycle Indicator

Zinger Key Points
  • AMD is trading in a long-term downtrend, making lower highs and lower lows.
  • If the chipmaker drops to the 200-day SMA, it may consolidate above the area before choosing the future direction.

Advanced Micro Devices, Inc AMD was falling lower Thursday, in tandem with the general market, which was continuing to suffer a bearish reaction to the Federal Reserve’s hawkish statement Wednesday.

The chipmaker has been trading in a downtrend since June 13, making a series of lower highs and lower lows. On Thursday, the stock was working its way toward the 200-day simple moving average (SMA) within that trend.

The 200-day SMA is an important bellwether. Technical traders and investors consider a stock trading above the level on the daily chart to be in a bull cycle, whereas a stock trading under the 200-day SMA is considered to be in a bear cycle.

The 50-day SMA also plays an important role in technical analysis, especially when paired with the 200-day. When the 50-day SMA crosses below the 200-day SMA, a death cross occurs. When the 50-day SMA crosses above the 200-day, a bullish golden cross takes place.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The AMD Chart: Although AMD is trading slightly above the 200-day SMA, the stock’s strong downtrend suggests AMD could drop below the area if the bearish pressure continues. In the meantime, the 200-day SMA is likely to act as support for at least a short period of time.

  • Thursday’s move lower was taking place on lower-than-average volume, which indicates the stock could be running out of sellers. If AMD reaches the 200-day SMA, the stock is likely to consolidate above the area for a period of time on decreasing volume before it’s decided whether AMD will rebound or drop into a bear cycle.
  • The stock was working to print a bearish kicker candlestick on Thursday, indicating lower prices may come on Friday. The small gap above, which exists between $98.87 and $100.28, may act as resistance on the next bounce.
  • AMD has resistance above at $99.82 and $106.99 and support below at $92.75 and $87.45.

screenshot_23.pngRead Next: AI Bubble Or Revolution? Goldman Sachs Research Takes A Look

Photo via Shutterstock. 

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: EquitiesLong IdeasShort IdeasTechnicalsTop StoriesMarketsMoversTrading IdeasExpert Ideassemiconductors
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!