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Timing Advanced Micro Devices: Will It Break Out Or Break Down?

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  • Advanced Micro Devices has been volatile in 2017 but is maintaining short term channels while offering competitive products.
  • AMD's technical analysis supports a strong buy when used in conjunction with the growth opportunities AMD has by increasing its market share in the industry.
  • Vega will prove to be a game-changer for AMD and the time to buy is now.

Advanced Micro Devices (NASDAQ:AMD) has had a volatile year so far in 2017. The stock is up almost 15% since it opened the year at $11.43 per share but ranged from $9.75 (down 14%) to $15.2 (up 36%). Since AMD reached its peak in late February, the stock began a downward trend until reporting its first quarter earnings. AMD lost 12% of its value in the two months leading up to its Q2 earnings report but looked as if it was forming a nice bull flag. However, when AMD reported its earnings in May, the stock dropped 25%.

Source: (Tradingview)Source: (Tradingview)

Advanced Micro Devices (AMD) reported a first quarter earnings report that was largely in line with expectations. Guidance however was better than expected so a strong sell off was over exaggerated based on the streets reaction of fewer sales from the Ryzen chips. We believe that expectations for the Ryzen chips were too high as the strong results of the new product will not be seen until 2Q. The sell off after the 1Q earnings report provided a great buying opportunity for the long term as the company reported that there will be new products coming out in the second half of 2017 in addition to the sales that will be generated by new products recently offered. Shortly after AMD's earnings release, rival company Nvidia (NVDA) reported very strong quarterly results resulting in a strong run up in the industry as it confirmed the demand and future growth for the chip sector. This began the start a short term uptrend in AMD's stock which has been trading in a nice channel for the past two months. Seen below, big moves have been made in this channel as the stock experienced 10-20% swings but maintaining the upward trend.

Source: (Tradingview)


This article was written by

AlphaTraderx profile picture
Investor and finance professional looking for companies with the most future potential. I have about 10 years of investing/trading experience and just recently started writing.

Analyst’s Disclosure: I am/we are long AMD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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