Advanced Micro Devices (AMD) was downgraded by a sell-side firm Thursday and the stock is trading lower on the day.
In our last review of AMD back on Jan. 4 we were bullish and wrote that "Traders could go long AMD at current levels. Risk to $132 and consider adding to longs above $165. The $201 area is our price target for now."
Our long recommendation was quickly stopped down and AMD declined into early March.
Let's see what could happen next.
In this daily bar chart of AMD, below, we can see that the shares had traded a few days above the 50-day and 200-day moving averages but gapped down below both of these averages Thursday. Trading volume has been heavier than average the past two months and the daily On-Balance-Volume (OBV) line has been steady in March. Thursday's price weakness could be hitting recent AMD buyers as their positions have quickly turned "underwater."
The Moving Average Convergence Divergence (MACD) oscillator moved up to the zero line but is likely to turn lower again.