Advanced Micro Devices (AMD) is on the move today. We last covered AMD on June 10th, writing that "The wait for a definitive breakout can be frustrating but we have it on the Point and Figure chart. Go long or add to longs at current levels risking a close below $52. The low $70's is our price target for now."
AMD had something different in mind and turned lower and would have stopped out buyers in late June. AMD is back on the upside today so we don't want to become gun shy. Let's take another look at the charts.
In this daily bar chart of AMD, below, we can see today's upside move is one of several probes over the past three months. Prices are above the declining 50-day moving average line and above the rising 200-day line. The trading volume has diminished over the past three months which is to be expected.
The daily On-Balance-Volume (OBV) line has been flat/steady the past two months suggesting a balance between buyers and sellers.
The Moving Average Convergence Divergence (MACD) oscillator is poised to cross the zero line on the upside for a new buy signal.
In this weekly bar chart of AMD, below, we can see the positive looking chart that we saw on June 10th with a few more bars. Prices are above the rising 40-week moving average line. The weekly OBV line is edging higher and the MACD oscillator is narrowing.
In this first Point and Figure chart of AMD, below, we used daily data and can see the fresh entrees on the chart along with a $63 price target.
In this second Point and Figure chart of AMD, below, we used weekly close only price data and here the chart is projecting a target of $83.
Bottom line strategy: It can be frustrating getting stopped out and then seeing a stock rally but ignoring risk or believing that all my recommendations (or anyone's) will be winners is foolish and could be dangerous to your wealth. Traders could once again probe the long side of AMD risking a close below $50 this time.
(Advance Micro Devices is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMD? Learn more now.)
