Advanced Micro Devices, Inc. AMD was spiking up more than 5% higher on Friday in tandem with the S&P 500, which was surging about 2.5% higher.
On Wednesday, Morgan Stanley analyst Joseph Moore reinstated an Overweight rating on AMD with a price target of $103. The price target suggests about a 19% increase from the stock’s current share price.
Moore’s bullish view did little to boost AMD’s stock price on that day but the stock had already started to reverse into an uptrend two days prior and on Friday, AMD confirmed the trend.
An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods.
Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.
In an uptrend the "trend is your friend" until it’s not and there are ways for both bullish and bearish traders to participate in the stock:
- Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on the higher low.
- Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low indicating a reversal into a downtrend may be in the cards.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The Advanced Micro Devices Chart: AMD’s most recent confirmed higher low was printed on Thursday at $80.23 and the most recent high was formed at the $86.38 mark on Wednesday. On Friday, AMD surpassed the most recent high to confirm a new uptrend is intact.
- If AMD closes the trading day near its high-of-day price, the stock will print a bullish Marubozu candlestick, which could indicate higher prices will come again on Monday. If the stock closes the day with an upper wick, AMD will print a shooting star candlestick, which could indicate lower prices are on the horizon, perhaps to print another higher low.
- There is a chance AMD is settling into a bearish head-and-shoulders pattern on the daily chart, with the left formed between May 12 and May 24, the head created between May 25 and June 16, and the right shoulder forming over the days that have followed. If this pattern becomes dominant, the measured move is about 30%, which suggests the stock could fall toward $57.
- If the uptrend continues, there is a gap above between $116.31 and $118.59 that could be more likely to be filled. Gaps on charts fill about 90% of the time, although it should be noted it could be an extended period of time before that happens.
- AMD has resistance above at $87.45 and $92.75 and support below at $84.24 and $79.70.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.