Featured Trade (U.S Stock): AMD bears are not out of the woods yet

AMD set to resume medium-term impulsive down move

Medium-term technical outlook (1-3 weeks) on Advanced Micro Devices (AMD)



Key technical elements

  • The recent rebound seen from its 30 Oct 2018 low of 16.17 is now showing signs of bullish exhaustion. In the past 2 days (07/08 Nov), its price action has started to form two daily “Spinning Top” candlesticks pattern after the gapped up seen post U.S. mid-term elections.
  • In addition, these negative sentiment “Spinning Top” candlesticks are being formed at the recent gap resistance of 22.75 seen on 24/25 Oct 2018.
  • There is no bullish divergence signal seen in the daily RSI oscillator at its oversold region prior to the recent rebound seen in the price action of the stock and it remains below a significant corresponding resistance at the 51 level. These observations suggest that medium-term downside momentum remains intact.
  • The key medium-term resistance stands at 24.55 which is defined by the descending trendline from 13 Sep 2018 high and close to the 50% Fibonacci retracement of the decline from 13 Sep 2018 high to 30 Oct 2018 low.
  • The next significant medium-term support rests at 15.30/14.50 which is defined by the former range resistance from 28 Feb 2017, the primary/major ascending trendline from 20 Jan 2016 low and Fibonacci retracement/projection cluster.

Key Levels (1 to 3 weeks)

Intermediate resistance: 22.75

Pivot (key resistance): 24.55

Supports: 19.20 & 15.30/14.50

Next resistances: 28.40 & 30.50

Conclusion

The on-going rebound from its 30 Oct 2018 low of 16.17 is more likely to be corrective in nature (dead cat bounce) within a medium impulsive down move structure in place since 13 Sep 2018 high. If the 24.55 key medium-term pivotal resistance is not surpassed, the share price of AMD may see another downleg to retest the 19.20 intermediate support before targeting the medium-term support zone of 15.30/14.50.

However, a clearance above 24.55 invalidates the preferred bearish scenario for an extension of the corrective rebound towards the 28.40 and even 30.50 next (close to the 61.8%/76.4% Fibonacci retracement of the decline from 13 Sep 2018 high to 30 Oct 2018 low).

Charts are from eSignal



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