You Ask, We Analyze: Why Advanced Micro Devices Stock May Be Set To Reverse Trend

On Thursday evening, Benzinga asked its followers on Twitter what they’re buying at the open on Friday. Benzinga selected one ticker from the replies for a technical analysis.

@josht543 and @Nena5804095 are buying Advanced Micro Devices, Inc AMD.

On Tuesday, AMD reported earnings per share of 92 cents on revenue of $4.826 billion, which beat the Street consensus of 76 cents on revenue of $4.52 billion.

The chipmaker also provided upbeat guidance for the first quarter and full year 2022.

Following the earnings beat and positive forecasts, a number of firms raised their price targets on AMD. Keybanc raised its price target to $165, Rosenblatt gave AMD a $200 price target and Raymond James and Mizuho raised their price targets to $160.

Even the lowest new price target indicates about 33% upside potential for AMD.

Related Link: 4 AMD Analysts Boost Price Targets Following Chipmaker's Stellar Q4, Predict Continued Share Gains

The AMD Chart: Heading into its earnings print, AMD broke up bullish from a falling wedge that had been holding the stock down since Dec. 28, when it hit a high of $156.73.

The stock then gapped up over 11% the day following the print but ran into a group of profit takers who caused AMD to close the trading day down 5.49% off the open.

On Thursday, AMD attempted to trade lower to fill the gap but was not able to fill it completely, which left a small range between $117.26 and $118.82 open. It is likely AMD will trade lower to completely fill that gap in the future.

AMD printed a gravestone doji candlestick on Thursday, which indicates lower prices may come on Friday.

If the stock falls lower, traders and investors can watch for AMD to print a possible higher low, which would confirm the stock will begin to trade in an uptrend. For bullish traders wishing to go long, a higher low could provide a solid entry point, but traders will want to watch for a reversal candlestick to indicate the higher low is in.

AMD is trading between the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, which indicates indecision. The stock is trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see AMD quickly close the lower gap, confirm a higher low above the $99 level and then for big bullish volume to come in and push the stock up above Wednesday’s high-of-day at $130.06. There is resistance above at $122.49 and $130.60.
• Bears want to see big bearish volume come into AMD to drop the stock back down into the falling channel. There is support below at $118.13 and $112.61.