Important points
Shares of Advanced Micro Devices fell sharply in after-hours trading on Tuesday after the chipmaker reported lower-than-expected third-quarter profits and gave a positive sales outlook. The decline in volume suggests that the stock has rebounded to the upper trend line of the descending channel. Ahead of the company’s quarterly results, large market participants remained on the sidelines. Investors should keep an eye on key support levels near $162, $132, and $112 on the AMD chart. If the stock resumes its long-term upward trend, investors should keep an eye on the bar pattern’s bullish price target of around $275.
Advanced Micro Devices (AMD) stock rose as the chipmaker reported lower-than-expected third-quarter profits and announced a positive outlook for current quarter earnings despite record data center revenue. As a result, the stock fell sharply in after-hours trading on Tuesday.
The company’s data center revenue will exceed $5 billion in 2024, up from its July forecast of $4.5 billion, CEO Lisa Su told analysts on a conference call. He said that it exceeded the But he said the after-hours stock price drop suggested investors may have been looking for more returns amidst the crisis. Insatiable demand for artificial intelligence (AI) infrastructure.
AMD stock is up about 13% since the beginning of the year as of Tuesday’s close, about half the return of the tech-heavy Nasdaq index over the same period. Shares fell 7.6% to $153.57 in after-hours trading Tuesday.
Below, we will analyze the technicals of AMD’s weekly chart and point out important post-earnings price levels that other investors may be paying attention to.
descending channel
Since the inverted hammer marked AMD’s all-time high (ATH) in early March, the company’s stock has been trading in a textbook downward channel.
Recently, the price has rebounded to the upper trendline of the pattern, but low volume suggests that large market participants will remain on the sidelines ahead of the company’s quarterly results.
With a post-earnings stock price expected to fall, we look at key support levels that could have an impact and forecast chart-based price targets to keep an eye on whether the stock will resume its long-term upward trend. Let’s try it.
Key support levels to look out for
The first important support level to watch is around $162. The stock is looking to open below this area on Wednesday, but it will be interesting to see if the bulls try to defend the trend line connecting the notable November 2021 peak and the comparable trading level in the descending channel. .
A decisive break below this level could cause the stock to fall to around $132, with investors looking for buying opportunities near a series of prices located around the June swing high and August swing low. There is a possibility.
Further selling could send the stock down to about $112, about 33% below Tuesday’s closing price, where the stock meets the support line of the 200-week moving average and a horizontal line dating back to August 2021.
Long-term bullish price target
If AMD stock resumes its long-term uptrend, we can use the bar pattern to predict a bullish price target. Bar patterns are a technique that uses past trends on a chart to predict future price movements.
In this case, we consider the stock’s upward trend from October 2023 to March of this year, reposition it from its early August lows, and project a target price of approximately $275.
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As of the date this article was written, the author did not own any of the securities mentioned above.
