AMD Follows In Nvidia's Footsteps And Pushes Higher

Advanced Micro Devices Inc. AMD shares traded higher Thursday, likely in sympathy with other chip stocks.

NVIDIA Corp. NVDA surged more than 12%, leading the way and pushing the rest of the sector up.

AMD closed up 5.3% at $137.50.

See Also: Nvidia Analyst Hikes Price Target By 30% On $10B Opportunity Presented By The Metaverse

AMD Daily Chart Analysis

• The stock broke out of what technical traders call a pennant pattern and has been flying higher since.
• The pennant pattern happens when the price is pinched between narrowing highs and lows and has nowhere left to go, and sees a large move in the same direction as the break of either pattern support or resistance.
• The stock trades above both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock is seeing bullish sentiment.
• Each of these moving averages may hold as a possible area of support in the future.
• The Relative Strength Index (RSI) continues to push higher and now sits at 83 on the indicator. This shows the stock is well into the overbought range where buying pressure is heavily outweighing selling pressure.

What’s Next For AMD?

Bullish traders would like to see AMD continue to rise, but should take caution as the stock could drop and see a period of consolidation at any time. Bulls are looking for this consolidation so the stock can stay moving upward at a healthy growth rate.

Bearish traders are looking to see the stock fall back lower and eventually reach where it traded in the pennant pattern. Extending the pattern support shows a higher low trendline where the stock could bounce. Bears are looking to see the stock drop below this potential support line for probable further downward movements.