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Advance Micro Devices Is Consolidating For Major Rally In The Near Future.

|Includes: Advanced Micro Devices, Inc. (AMD)

Summary

AMD was oversold after May's earnings falling more that 25%.

After this precipitous fall, AMD has rallied upwards of 30% in a short period of time.

With no new activities on the horizon there is no immediate momentum for further upside.

With the long "weekend" coming up and coinciding with a month end and quarter ending today, recent gainers would have exited their long position for safety.

Any further down turn in AMD should be seen as a tremendous buying opportunity.

Looking at any daily chart for AMD you will see that there is definitely a long term bullish picture. However, for about three separate instances in the last two quarters, AMD has traded off a roughly $10 support level and moved significantly higher.  On the upside AMD tried to break above the $15 per share level but experience  very strong resistance. The $15 is an approximate 50% premium above the $10 resistance level.

By averaging about $10 support level and $15 resistance level is pointing to a breakout level of about $12.50. Any fall below this point is a key buy signal that investors should move on. You will sees the stock attempting to stabilize at $12.50.

for the  longer term or even near short term AMD's stock appears to have more movement to the upside.  Any fall below the 12.50 support level is a buy signal. For safety any fall below 11.90 I would signal a definite buy. Any fall below $10.20 approaching the $10 resistance level would signal a very Strong Buy.

At $10.20 or below, I would definitely see 50% upside in the near term. This would not be too far fetched considering that AMD would be reporting in about a month from now and should meet or slightly exceed wall street expectations. 

I expect AMD to be at $16.00 by January 2018 which is would be more than 25% upside from today’s month-end and quarter close.

I good time to get back into AMD would be in the final session today or to try and gain substantially would be to wait for another 5 to 10% drop to materialize in a week or so.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in AMD over the next 72 hours.