AMD and Nvidia Are Hurting; Better Check the Charts

Chip stocks, particularly Advanced Micro Devices (AMD) and Nvidia (NVDA) , are getting crushed on Sept 1.

While the broader market selloff certainly doesn’t help matters, these stocks are under pressure for a more specific reason.

On Wednesday, Nvidia filed an update with the Securities and Exchange Commission. The chipmaker said the U.S. government ordered it to stop exporting artificial-intelligence components to its customers in China.

The company said it could hit revenue by about $400 million, while AMD said it would have a nonmaterial impact.

Nvidia stock at last check was down more than 11% in midday trading, while AMD stock gave up 6%.

Let’s look at the charts now.

When to Buy the Dip in Nvidia Stock

Weekly chart of Nvidia stock.

Chart courtesy of TrendSpider.com

Last week, Nvidia stock rallied to its 10-week moving average and the prior week’s low, where it was rejected. That was the last chance for bullish traders to bail on their position, as since then it has done nothing but unravel.

We outlined critical support in this stock just eight days ago, highlighting the level that had to hold. It hasn’t and with today’s decline, Nvidia stock is now trading at fresh 2022 and 52-week lows.

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My eye is drawn to the $125 area, where we find the 50-month and 200-week moving averages. This was a general area of support in 2020 and 2021, while the low for last year sits down at $115.30.

If Nvidia stock sees $125, it will be down 64% from its all-time high. If $125 doesn’t hold, the $110 to $115 area could be in play.

When to Buy the Dip in AMD Stock

Weekly chart of AMD stock.

Chart courtesy of TrendSpider.com

From a business perspective, AMD had held up better than many of its peers (maybe surprisingly, better than Nvidia). But today AMD stock is getting sacked, too.

Unlike Nvidia, it’s not at new 52-week lows, but it’s not looking all that healthy.

Source: https://www.thestreet.com/investing/amd-and-nvidia-are-hurting-better-check-the-charts-technical-analysis-sept-2022?puc=yahoo&cm_ven=YAHOO&yptr=yahoo