Semiconductors rallied after news the U.S. will remove currency manipulator tag from China. Trade tension between the U.S. and China has been easing which likely to give another boost in the chips industry. Among those 137 stocks, AMD outperforms 97% of them. Currently, it is trading near its 52 weeks high and however S&P is also trading near new highs, which makes AMD's performance in line with the market. AMD is currently showing a bull flag pattern. There was a flag pole right left to its first bar as the chart shown, after a consolidation AMD appears to have broken out from the first bull flag pattern. And now it seems has been shaping another bull flag pattern with a consolidation range which is indicated above(support roughly at 47.6 and resistance roughly at 49.1). The outside range indicated by red lines were the expected move that options market priced in for this week, means we are supposed to be inside of this range with 3.05 higher or 3.05 lower of AMD and it should stay in this range about 68% probability of the time for this week. ATR indicator is about to trend downside means the risk of the stock starts to be compressed and consolidation may need. So I think the stock will come back to test the upper edge which is the breakout area roughly at 49.1with a few sessions moving forward then once the momentum been fueled it will break out to show another bullish trending to upside. Besides, the overall trend indicator DMI is heading upward as the long trend strength(blue line) is still dominating the directional momentum. And today there were 174.42K, 186.93K, 136.71K with strikes of 49.5, 48, 55 long calls bets set on Jan, Feb 14th and Mar respectively which also is signaling the quite bullish view from the investors. So I will consider buying a pullback until the price edging close to the lower edge of the orange line as a second entry and target a 55 stop gain for this setup.
Good analysis. I got a similar chart to yours. $50,80 is only resistance I got (upper line trend since June 2019). Expect 3-4% volatile pattern (base $48,80) until next earnings.
Khabilan
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@Tschain, Thanks bud, I agree! A consolidation within this support zone may continue till the breakout we expected up to 58 or even higher at 60 levels. The thing is I could set up trade during the consolidation period but for a one-way ticket to upside trending ( Such as SPX), I'd rather a pullback to manage some top risks.
Tschain
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@Khabilan, yes, the upper line of the up-trend since October 2019 is around $58. I have that as the next resistance aswell. $46,70 as the lower line of up-trend. That's what I can imagine being the volatile lower area until technical outbreak up again.