AMD seems to be the contrarian play in the semiconductor field right now so I'm going to go ahead and suggest starting a position at these levels around $90 a share. It has been outperformed by its peers to a great degree recently for no apparent reason. I assume profit-taking attributed to taking it down from nearly $100 a share.
Buy under $93.
Sell half at $110.
It will retest the $100 level, breakthrough, and hit resistance at about the $110 level from profit takers. Slight chance it has more legs than that but I'd say $110 is a fair price target for this stock.
The SMH is up 11% in the last month and a half and AMD is down nearly a percent. Easy 10% return on this trade if not 20% if it hits my estimated price target.
hit $110 this week? or is $110 your mid term price target?
EBITDAtiger
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@Wilson5s, I would think it'll hit $110 next week. At that point as a short-term trade, I would sell half and let the other half ride in case of more upside.
Wilson5s
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@EBITDAtiger, hmm i would agree, but what are your thoughts on the short term prediction for this week?
I really like Lisa Su and the integration of AMD in laptops, gaming consoles, cars, and data centers. But again, anything could set off investors negatively and smack AMD back to 80.
EBITDAtiger
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@Wilson5s, earnings beats seem to mean less and less to investors. I am still optimistic because I think it was a great overall quarter and this is a positive inflection point for the company. Since it sold off slightly despite the earnings beat, I would say it doesn't hit $110 for a while now. I would guess it'll take the rest of this week to recover and then next week it should continue its upward trend. Maybe a month from now it'll hit $110. Load the boat under $93 & especially under $90.
Wilson5s
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@EBITDAtiger, Do you think we can shoot up into the green and retest $97 today? Or are we playing dead for a while....?
EBITDAtiger
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@Wilson5s, unfortunately, that probably won't happen today, that's too big of a move and there is no more news. It will retest the $100 level and when it does it will breakthrough. So I would get positioned now for a semi-long position. If you are playing through options, go at least 60 to 90 days out with the expiration.