Advanced Micro Devices - AMD - Daily - Breakout of Range

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Breakout of 1-year trading range with volume and relative strength to the market. Note how the trend indicator "Range Movement" bolted out to a new high well before this breakout, which indicates accumulation and an easier path on the upside.

Buy pullbacks under previous day's lows in the next 10-days. The stop is wide to enter here, so perhaps 1/3 long here, 1/3 on drops under previous day's lows on the next two times. For example, if today's low holds (4.63) for the day, then tomorrow you would buy at 4.62. If tomorrows low is 4.50 (just a guess), then the next day you would buy at 4.49. This would spread your entry out over 3 days.

Stop Loss = 3 times the 11-day ATR, subtracted from entry.

Tim 4.70 last 10:12AM. Earnings are due on 7/17, in 2 days = warning for anyone wary of a massive gain or loss if you hold through an earnings report. NOTE HOW LARGE THE MOVES ARE AROUND EARNINGS in this stock.
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Went below 4.50 already today. I wonder if the idea still holds? I've seen this action before and only range expansion comes into mind, but we have 2 days to earnings. I wonder if it will come back from tops on tech indicators. See my rebound chart. I would envision a move lower after today's reach and dive, going to 4.20s and 'surprise' earnings can make it touch 5...finally.
Well I heeded your advice about the large moves at earnings and seeing that the last 3 out of 4 earnings you have marked were drops I avoided making a move on this. Down 18% today. Question is, has it dropped too far or are you considering this a buying opportunity?
+1 Reply
2use gatorNic
indeed, it dropped each time, i count all 4 a failed rallies. Problem is that it did not dive 20% in previous ones i think. And with each failed ER people may get even more skeptical. On the other side, its a beaten underdog.
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timwest PRO gatorNic
I'm watching and waiting to see if it can climb over the lowest EPS line drawn on the chart. I waited until after earnings to consider buying for myself, but didn't want to miss a blastoff like the chart was giving an indication of. I like the old "three day rule" after bad news and then look for a rebound then. Today is day 2 (Monday, July 21), so let's revisit this stock at the end of Tuesday and on Wednesday morning to see how it is then.
Please mention your entry as you decided to trade this market. Thanks for your all informative analysis.
timwest PRO HamedAghajani
I'll do my best to update everyone.
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We are waiting on that significant APU partnership(s) with either GOOGLE or APPLE, possibly both. Still hanging tight and bubbling in an ascending triangle.
2use QuantitativeExhaustion
One of the few stocks that were in plus yesterday. Is that greater confidence than we think? Misses ER - tumble double digits. But in a huge market sell-off stays put and green. So far this is the most manipulated large cap i've seen
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AMD rallied back to the Key Level and provided "in hindsight now" a decent exit level for any buys and a decent place to sell short (but this is hindsight analysis)
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2use timwest
I actually have that one as well from your chart. it even bounced off another one recently didnt it?
Sure did get ugly once support broke. CEO couldn't deliver on time, so he was ousted. I still like AMD, just needs more time before we attempt to break that 4.65/4.80 resistance wall.
Look at AMD's track record Tim. They've lagged every bull market run since its been trading in the mid 1980's. 1999-2000 was a very notable trend. AMD didn't do much in the 90s up until it ran up 500% in less than 6 months right before the tech bubble was popped. 2006, once again AMD lagged the market run from 2003 to 2006 and sees another 300% run. However, AMD would fall a year before the financial collapse in 08. This time looks to be no different than 1999/2006. AMD is lagging the overall market by 6 years. Price is nearly the same as it was at the lowest point of the financial crisis (and I do think we get close to breaking it ~2.00). If AMD does attract speculators could it run up 1000% this time? I think so. Given that AMD missed the tech rotation twice, and has built 25% short interest, also attractive for option traders with Implied Volatility nearing it's record lows, and technology + partnerships that will disrupt Intel's monopolies in CPU & servers, AMD could see a 1000%+ return.
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