Trading Strategies For Advanced Micro Devices Before And After Q1 Earnings

Advanced Micro Devices, Inc AMD was trading flat Tuesday ahead of its first-quarter earnings print set to take place after the market closes.

When AMD printed its fourth-quarter earnings on Jan. 30, the stock dropped about 2.5% the following day and continued to trade mostly sideways until Feb. 29, when the chipmaker started to make a series of new all-time highs, which brought the stock to a new high of $227.30 on March 8.

For that quarter, AMD reported second-quarter non-GAAP earnings per share of 77 cents, in line with the consensus estimate. The semiconductor stock printed revenues of $6.17 billion, which exceeded the consensus estimate of $6.12 billion.

For the first quarter, analysts, on average, estimate AMD will report earnings of 61 cents per share on revenues of $5.46 billion.

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Ahead of the event, Rosenblatt analyst Hans Mosesmann reiterated a Buy rating on AMD and a price target of $250. Read More…

From a technical analysis perspective, AMD's stock looks neutral heading into the event, trading in an uptrend but showing signs the local top may be in.

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.

Bullish On AMD? Traders and Investors looking to play the possible upside in AMD stock but with diversification may choose to take a position in the Spear Alpha ETF SPRX. SPRX is an actively managed fund offering investors the opportunity to achieve more than passive tracking of the broader market. Some of the fund's top holdings include NVIDIA Corporation NVDA, weighted at 10.71%, AMD, weighted at 7.21% and Zscaler, Inc ZS, weighted at 9.59.

SPRX invests in companies capitalizing on emerging trends in industrial technology, aiming to uncover undervalued opportunities within various value chains aligned with themes such as enterprise digitalization, automation, AI, environmental focus, photonics, additive manufacturing, and space exploration. The ETF, traded on the Nasdaq exchange, targets long-term capital growth and is up about 60% over the last twelve months.

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The AMD Chart: AMD rebounded into an uptrend on April 19 and has made a series of higher highs and a higher low to confirm the trend. The most recent confirmed higher high was formed on April 24 at $157.66 and the higher low was printed at the $146.75 mark on April 25.

• On Tuesday, AMD was working to print a shooting star or doji candlestick, which could indicate the local top has occurred and the stock will trade lower on Wednesday. If that happens, bullish traders want to see AMD rebound from the $147 level, which will signal the uptrend remains intact.
• If AMD enjoys a bullish reaction to its earnings print and rises higher on Wednesday, the stock will regain the 21-day exponential moving average (EMA), which would be bullish for continuation. If that happens, the eight-day EMA is likely to cross above the 21-day EMA, which would be bullish over the mid-term.
• AMD has resistance above at $164.46 and at $180.01 and support below at $155.65 and at $145.29.