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Advanced Micro Devices (NASDAQ:AMD) Part of 2020’s Tech Renaissance

Advanced Micro Devices (NASDAQ:AMD) Part of 2020’s Tech Renaissance

Technically oriented traders might choose to watch for “confirmation” of the next leg up in AMD stock. In particular, they will feel that the price needs to break above the February high mark and stay there for a while. Or, maybe they’re anticipating a significant catalyst to propel the share price higher.

Overly cautious investors may end up leaving money on the table, though. Rather than waiting for a particular price breakthrough or a mind-blowing catalyst, informed investors only need to study the company. In doing so, they’ll notice that AMD stock already offers a superior value proposition.

Making the Shift

Considering the toll that the coronavirus crisis has taken on the economy, Advanced Micro Devices’ resilience has been impressive. the ability to pivot to an altered business model helped enormously in this regard.

For instance, shelter-in-place mandates have precipitated a shift towards PCs and laptops. this is because many students and workers would like these devices in order to get their work done at home.

That’s absolutely fine with an adaptable company like Advanced micro Devices. With the AMD Ryzen pro 4000 series mobile processors, for example, the chipmaker specifically marketed their “work-anywhere flexibility.”

In all likelihood, AMD’s client Business Unit Senior vice president and general manager Saeid Moshkelani, was speaking directly to homebound workers and students when he touted the Ryzen pro 4000 processors as defining “the new normal for pc experiences – from high-end desktop computing to ultrathin and gaming notebooks, and currently the modern business notebook.”

In another recent example, Graphics Business Unit corporate vice president and general manager Scott Herkelman acknowledged that today’s professionals are operational under “increasingly tight budgets.”

Herkelman’s response, of course, was an AMD product. in particular, he suggested the AMD Radeon pro VII workstation graphics card. Again, the main target is on a component designed for stay-at-home-compliant computing devices.

Price Performance

Relative Valuation

Shayne Heffernan Trade Idea

We can’t effectively call AMD stock a “growth stock” unless the company maintains an bold vision for the future. luckily for the company’s shareholders, Advanced micro Devices remains supremely confident in its ability to execute.

Based on the company’s first-quarter fiscal results, the confidence is justified. As reported by InvestorPlace contributor Chris Lau, AMD’s quarterly revenues came to $1.79 billion. That represents very strong 40.9% year-over-year revenue growth.

Moreover, compared to the comparable quarter of 2019, AMD demonstrated improvement in multiple areas throughout this year’s first quarter. Specifically:

$177 million in operating income, indicating a year-over-year increase of $139 million

Net income of $162, representing a massive year-over-year improvement of $146 million

Earnings per share of 14 cents, signifying a year-over-year increase of 13 cents per share

Given those stats, AMD’s President and CEO had every right claim that the company “executed well within the first quarter.” Investors can hold their shares confidently because the company should continue to generate outstanding revenues.

Looking toward the second quarter, the company predicts sales of roughly $1.85 billion. that would constitute a year-over-year increase of 21%. additionally, AMD projects 25% year-over-year revenue growth in the company’s full fiscal year.

These expectations are realistic because the company’s top-of-the-line components are ready-made for the “new normal” amid the realities of the stay-at-home economy.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 51.02.

The projected upper bound is: 59.69.

The projected lower bound is: 47.06.

The projected closing price is: 53.38.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with ADV MICRO DEVICE), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 29.6986. This is not an overbought or oversold reading. The last signal was a sell 9 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 49.49. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 66 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -3. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.

Rex Takasugi – TD Profile

ADV MICRO DEVICE closed down -1.980 at 53.190. Volume was 31% below average (neutral) and Bollinger Bands were 49% narrower than normal.

Open      High       Low          Close          Volume
56.010    56.080     53.020       53.190         51,618,864
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bearish
Long Term:         Bullish
Moving Averages: 10-period      50-period        200-period
Close:           54.41          50.48            42.26
Volatility:      50             86               69
Volume:          57,681,560     75,396,872       63,688,528

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

ADV MICRO DEVICE is currently 25.9% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods.

Our volume indicators reflect volume flowing into and out of AMD.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AMD.O and have had this outlook for the last 8 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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