Advanced Micro Devices, Inc. AMD 0.46% hasn’t generated any positive momentum from its second-quarter earnings ad revenue beat reported on July 25. After briefly surging to a new 10-year high of $15.65 following the report, AMD made a sharp reversal and has trader lower ever since.
Traders seem to have seen the earnings beat as a selling opportunity after the stock’s impressive 275-percent run-up over the past three years.
Wall Street remains conflicted over AMD following the earnings beat. Longbow Research downgraded the chip maker on the day after earnings, while Baird initiated coverage with an Outperform rating.
For now, at least, AMD’s post-earnings sell-off has it at the bottom range of an upward-sloping trading channel that has been in place since early May.
If the stock breaks below $13, however, it will drop out of the channel, leaving technical traders searching for the next support level. The $12 level served as support in late June, but a move below $12 would likely signal a retest of the $9.50-$10 range that supported the stock in May and previously in January.
On the other hand, if AMD finds support at around $13.50, it may bounce back to the top of the channel, making new decade highs in coming weeks. If AMD follows its recent trading pattern, it might not bump into the roof of that channel until it makes it to around $16.50.
AMD bulls may be disappointed with the post-earning trading action, but it’s…
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