Advanced Micro Devices Has Been Above Its 200-Week Moving Average Since February. Here’s How To Trade The Stock Now.

Advanced Micro Devices

AMD
has been above its 200-week simple moving average, or “reversion to the mean” since the week of February 3, 2023. It’s also been above its 200-day simple moving average since March 2, 2023.

AMD reported quarterly earnings on May 2, and has beaten EPS estimates in 21 of the last 22 quarters. The company matched estimates on November 1, 2022. The stock has an elevated p/e ratio of 37.12% and does not offer a dividend, according to Macrotrends.

The Daily Chart for AMD

Shares of AMD set its two-year high of $164.46 on November 30, 2021. The stock then declined by 66.8% to its October 13, 2022, low of $54.57. This huge decline has been consolidated since then with a gain of 74.2% since this low. The stock is up 46.7% year-to-date but is 42.4% below the high.

AMD popped above its 200-day simple moving average when it was $79.42 on February 1, 2023. This moving average was a magnet between February 21 and March 2. Holding this average led to a rally to $102.43 on March 23. This quick move was helped by a golden cross set on March 17 when the 50-day simple moving average crossed above the 200-day simple moving average.

The horizontal lines from bottom to top are the monthly value level for May at $69.86, the annual pivot at $98.21, a weekly risky level at $103.00, a quarterly risky level at $110.54, and the semiannual risky level at $129.18.

The Weekly Chart for AMD

The weekly chart for AMD is neutral with the stock above its five-week modified moving average at $90.60. It’s also above its 200-week simple moving average or ‘reversion to the mean’ at $79.36. The 12x3x3 weekly slow stochastic reading is declining at 61.97. At the high the stochastic reading was above 80.00, which is an overbought reading.

Trading Strategy: Buy AMD on weakness to its monthly value level at $69.86. Reduce holdings on strength to its quarterly risky level at $110.54.