AMD has surged approximately 25% year-to-date. The stock price fluctuated between $90 and $120 for most of the second half of 2023. Following its earnings report in November 2023 and the announcement of its foray into the AI space, AMD skyrocketed to a high of over $225, marking a 138% increase from the report. Although the stock has retraced about 15% from its peak, it still boasts an impressive 85% gain since November's earnings.

While AMD was somewhat overshadowed at the recent GTC 2024 event by Nvidia's new chip announcement, it is currently finding support at the lower end of the channel it has respected since the November 23 rally. Coincidentally, this support aligns with the 50-day Exponential Moving Average (EMA). Presently, AMD has limited upside potential, as it faces a bearish trend line that needs to be breached; failure to do so could result in a breakout below the channel, leading to further downward movement. In the event of a decline, initial support is expected around $162.5, with secondary support at $150, which could also align with the 200-day EMA.

At this juncture, it is challenging to predict AMD's future trajectory, as there is no clear catalyst to drive the share price higher. Consequently, the stock is likely to move in line with the broader market or at least with other chip-related stocks.

I have been selling Cash Secured Puts on AMD, both holding the contract until expiration and engaging in swing trades for quick profits. With a 40% Implied Volatility (IV), AMD is an attractive choice for selling options, offering decent premiums. These contracts have proven profitable thus far. However, going forward, I will exercise greater caution if AMD breaks below support, as this could lead to a more substantial decline in the stock price. Nevertheless, I am open to being assigned and owning AMD shares, with my ideal entry price being $150-$140, approximately 20% lower than the current value.

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