The Reason for the Risin’ in Advanced Micro Devices, Inc. (NASDAQ:AMD) Share Price
So, why did AMD stock price jump after tanking for several consecutive days? It’s all basically a relief rally: Lisa Su, the CEO of Advanced Micro Devices Inc., denied reports that she plans to leave the company and join IBM (NYSE:IBM). Evidently, technology news website WCCFTech had published an article titled “Exclusive: Lisa Su Considers A Role Beyond AMD and Prepares A Successor,” claiming that there were sources to corroborate the rumor that Su intended to take over Ginni Rometty’s roles as President and CEO of IBM.
This gossip was quickly dispelled when Su took to Twitter (NYSE:TWTR), posting, “Just for the record, zero truth to this rumor. I love @amd and the best is yet to come!” That tweet was enough to push the AMD stock price up several points, and currently it stands at a 63% gain year-to-date.
As I see it, the rumor of Su’s departure should never have put pressure on the AMD share price in the first place. When it comes to gossip, I like to turn the old adage on its head: “Sell the rumor, buy the news.” Sometimes the market will irrationally dump shares of a perfectly good company due to a mere rumor, thereby providing more clear-minded traders an opportunity to accumulate shares in anticipation of the actual facts coming to light.
Trade War Easing Could Bolster the AMD Share Price
If you subscribe to the belief that the tariff battle between the United States and China won’t go on forever, then I believe a stake in AMD stock is as valid a bet as any. Chipmakers have been hit extra hard throughout the trade war, and they’ll be prime candidates for an awe-inspiring rebound when all tensions are finally released.
I believe that we’ve already seen this in action, as the People’s Bank of China fixing the Yuan exchange rate at less than seven per dollar — usually an event that wouldn’t move the needle in the American stock market — was sufficient to induce euphoria in the NASDAQ and undoubtedly added fuel to the rally already sparked by Lisa Su’s tweet.
Still a Leader Among Chipmakers
Let’s not forget that AMD remains a strong contender in the semiconductor niche. The company’s Q2 earnings announcement revealed revenues of $1.53 billion, a decent beat considering the analyst consensus estimate was $1.52 billion. Perhaps more significantly, AMD’s revenues showed an increase of 20% compared to the previous quarter, demonstrating the type of growth that I look for when considering a long-term position.
Moreover, with the latest iteration of AMD’s Radeon graphics cards having been released on July 7 and its ultra-powerful second-generation Ryzen CPU set to be a game-changer, I have no misgivings in recommending AMD stock as a candidate for the number-one position amid the competitive but ever-lucrative global microchip market.
The Takeaway on AMD Stock
The AMD share price has already displayed signs of recovery from the depressed semiconductor market as well as the ongoing tariff war. There’s still room to reclaim Advanced Micro Devices Inc.’s all-time high price, and I fully expect it to break through that barrier in the near future.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 31.96.
The projected lower bound is: 26.42.
The projected closing price is: 29.19.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 19 white candles and 30 black candles for a net of 11 black candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 20.9208. This is not an overbought or oversold reading. The last signal was a buy 0 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 38.91. 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 40 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 -92. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 13 period(s) ago.
Rex Takasugi – TD Profile
ADV MICRO DEVICE closed up 0.330 at 29.190. Volume was 100% below average (consolidating) and Bollinger Bands were 60% wider than normal.
Open High Low Close Volume___
28.470 29.280 28.370 29.190 10,487
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 31.08 31.23 25.15
Volatility: 71 57 83
Volume: 59,373,120 64,888,112 81,451,256
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.
ADV MICRO DEVICE is currently 16.0% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 5 periods.
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