Advanced Micro Devices Beat On Earnings After Holding Key Value Levels. Here’s How To Trade The Stock Now.

Advanced Micro Devices (AMD) beat earnings expectations after the close on Tuesday, February 2. At the end of January the stock held its annual and semiannual value levels at $100.79 and $99.97. Holding key levels on weakness indicates that it is time to buy the stock.

On Monday and Tuesday, the stock was above its 200-day simple moving average now at $109.78. The 50-day simple moving average is a price target and is declining at $137.34. The weekly chart is negative with the five-week modified moving average at $127.00.

AMD is not cheap. Its p/e ratio is 52.89% and the company does not offer a dividend, according to Macrotrends. The semiconductor giant beat earnings-per-share estimates in six consecutive quarters.

The Daily Chart for AMD

Shares of AMD were trading sideways 52 weeks ago. The stock was tracking its 50-day simple moving average until it traded as low as $72.50 on May 13, 2021.

On April 21, 2021, there was a death cross where the 50-day simple moving average fell below its 200-day simple moving average. This proved to be a false sell signal as a golden cross was confirmed on July 28, 2021. From this buy signal at $97.93 the stock began its rise to its 52-week high of $161.88 set on November 22.

The downside shown on the chart since this high gained downside momentum when shares of AMD failed to hold its 50-day SMA at $143.21 on January 5.

Note how the annual and semiannual value levels at $100.79 and $99.97 held on January 28. These are the two horizontal lines converged below the 200-day SMA in the green line. The horizontal lines at the top of the chart are the quarterly and monthly risky levels at $139.68 and $156.53.

The Weekly Chart for AMD

The weekly chart for AMD is negative with the stock below its five-week modified moving average at $127.00. It’s well above its 200-week simple moving average or reversion to the mean at $58.29. The 12x3x3 weekly slow stochastic reading is declining at 30.50. At the high the stochastic reading was above 80.00 making the stock overbought.

Trading Strategy: Buy AMD on weakness to its annual and semiannual value levels at $100.79 and $99.97. Reduce holdings on strength to its quarterly risky level at $139.68.