Jim Cramer on his Mad Money show last night said he no longer trusts Advanced Micro Devices, Inc. (AMD) with a glut of semiconductors in the marketplace. He said if you add in trade war and a strong dollar then there could be bigger problems. Let's check the charts and indicators to see what shape they are in for AMD.
In this daily bar chart of AMD, below, we can see a sideways period from October to May followed by a strong rally into September. Over the past two to three weeks AMD has weakened. Prices have broken below the rising 50-day moving average line. The daily On-Balance-Volume (OBV) shows a decline from mid-September. A declining OBV line happens when sellers are more aggressive with heavier volume be transacted on days when AMD has closed lower. The Moving Average Convergence Divergence (MACD) crossed to a take profits sell signal last month and is now not far from crossing the zero line for an outright sell signal.
In this weekly bar chart of AMD, below, we can see a mixed picture. Prices are above the rising 40-week moving average line and there is no chart support until the $20 area. The weekly OBV line turned down last month and tells us that aggressive buying and been replaced with aggressive selling. The weekly MACD oscillator is poised to cross to the downside and a weekly take profits sell signal.
In this Point and Figure chart of AMD, below, we can see that AMD reached a downside price target but we can also see that next support is well below the market.
Bottom line strategy: AMD has turned lower. Prices could hold in the $26-$24 area but more likely we could see prices slip lower to next support in the $20-$18 area.