Quick Trades - AMD (short) + MU (long)

NASDAQ:AMD   Advanced Micro Devices Inc
Pretty straightforward. Here's what I just posted on Seeking Alpha:

"MU -- extremely oversold conditions. Yesterday before the close, went long the 10/26/2018 40.00 Call (up 42%).

AMD -- extremely overbought conditions, just went go long the 10/26/18 $31.00 Puts (up 16.6%)"


Just look at the RSI levels for each. To be clear, both companies are solid / great stocks to own long-term, I'm just trading around all the volatility/profit taking.


Not sure how long I'll hold both of these, but I'll post updates periodically.

Sep 14
Comment: AMD puts are now only up 11.71% right now.

While I do expect more downside, I suspect it will be short-lived. Yesterday's sell-off was nothing more than profit-taking. Those are the dips I like to take advantage of and then move on (typically I would have sold already, but want to see how this plays out a bit longer).

As you can see, with shares up ~7%, investors want in this name -- driven by the improving fundamentals which lead to multiple analyst upgrades (this is one of the most love stocks out there right now). Average analyst price target is ~$40. This is why investors are stepping in today.

When I shorted AMD, RSI was at the overbought level of 85, now it's at 77. Historically, RSI for AMD can go to a high of +87. So we are in a trading range.

So, here's what I'm doing. I am maintaining my Oct-Puts and will hedge it with Oct-Calls. I'm looking at the 10/12/18 $33 Calls.

I'll likely buy these early next week. I don't typically like to open new positions on a Friday. Tho doesn't hurt to do so given that this is just a hedge position.

Enjoy the weekend everyone.

More updates to come.

Sep 20
Comment: With MU options up +78% and earnings out today, I want to protect my profits by hedging with Puts.

I just went long the 9/28/2018 46.50 Puts (small hedge position).

Should be an exciting afternoon ;-)

More to come to stay tuned.

(accidentally posted this comment below lol)
Oct 03
Trade active: Congrats to those who followed this trade! Patience is always key.

AMD Puts are up +51%
MU Calls are up +30%

Total Gain +81% -- not bad for a less than 30-day trade ;-)

Going to keep these open, but trimming AMD to take in some profits. Totally up to you how you play it from here -- I'm not too greedy ;-)

I have another pair trade coming soon.

Stay tuned and congrats again.

Oct 24
Comment: Gosh those Puts on AMD would be up +300-500% with the stock down +20%.

Congrats if you stayed in.
Oct 31
Comment: New Position: AMD 01/17/2020 20.00 Calls

I will be trading around this position throughout 2019.

AMD is a perfect trading stock.

Nov 01
Comment: Just opened: AMD 12/21/2018 22.00 PUT

Very strong move today, but I think there will be some resistance/profit-taking here. Hoping to collect some cash as sellers step in.

Also, forgot to mention that I opened the MU 12/21/2018 40.00 Calls in one of my portfolios. Not too late to get in this name (I'd wait for a small pullback)
Curious on what your thoughts are now for this pair. I sold my MU at $58, really out of dumb luck. Started learning TA this year (2018).
Akhokhar86 ThankUKind
@ThankUKind, Candidly, I'm glad I exited this trade when I did. I wouldn't be in this pair trade now. I like INTC technical set up and earnings play. I'd be a buyer into the print.

AMD is a hold at best. I wouldn't want to play earnings (50/50 chances aren't my type of investments). MU is just left for dead until they report again in Q4.
ThankUKind Akhokhar86
@Akhokhar86, fair enough and seems logical. Thank you genuinely for the reply @Akhokhar86 .
I am apprehensive about going long on any stocks with global markets behaving in the manor they are as of late.
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Today's candlestick closed completely within yesterdays which shows AMD is starting to consolidate. Personally based on MFI patterns on a 30-min candlestick chart couples with bearish volume and momentum divergence I think we should see some downside soon.
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The 8% AMD is up today is coming as a surprise …
+1 Reply
@phips, yes and no, this stock is loved and actually has improving fundamentals. Analysts have upgraded this stock a lot this week.

As I mentioned above, the sell-off I'm capturing is related to profit-taking. I suspect more of it is to come, but wise to hedge at this point (revising Calls on Monday).
+1 Reply