Jim Cramer sat down with Lisa Su, president and CEO of chipmaker Advanced Micro Devices Inc. (AMD) , on "Mad Money" Thursday night. Cramer has called Su a "hero" for her remarkable turnaround of the company.
Shares of AMD traded for just $1.80 when Su took over as CEO, but now trade over $30. Su said that rise in value is due to great products that have allowed the company to take market share, improve its balance sheet and steadily increase gross margins.
As AMD continues to operate in strong end markets, Su said, the data center market always needs more processing power and AMD is the "guts" of many large-scale data centers. The gaming market and PCs remain a huge market for chips, too, she added, noting that AMD has to make bets three to five years in advance.
Let's check and see again how the short- and long-term charts look. We looked at AMD on Tuesday and concluded that, "AMD is pointed up, but extended on the daily chart. Prices could dip or pullback for a couple of days before resuming their uptrend. Use a dip of one to three days to add to longs. The $65 area is our longer-term price objective."
In this daily bar chart of AMD, below, we can see that prices did dip on Thursday so we have the start of our "one to three days" dip. Prices closed near the middle of the range yesterday suggesting to us that buyers used the weakness to add to their long exposure. If buyers were not interested Thursday then AMD should have closed nearer to the lows of the day. AMD is still above the rising 50-day and the rising 200-day moving average lines. Trading volume was not out of the ordinary and the daily On-Balance-Volume (OBV) made only a minor dip. The Moving Average Convergence Divergence (MACD) oscillator is still bullish.
In this weekly bar chart of AMD, below, two more trading days did not alter the bullish alignment of prices and the indicators.
In this Point and Figure chart of AMD, below, we used weekly high/low price data and this chart shows a slightly higher price of $68 or $3 higher than the weekly close only chart we presented on Tuesday.
Bottom line strategy: Traders should continue to view price weakness on Friday and maybe Monday morning as an opportunity to go long AMD.
