TBI's Thoughts [20]: AMD (NASDAQ: AMD)... Advanced Money Destroyer?

Hi everyone, today’s free newsletter of the week is finally here!

But before that, let’s do a quick review of the returns generated from the last 4 free newsletter ideas (prices and returns are rounded to the whole number):

Without further ado, let’s delve into today’s newsletter:

Advanced Micro Devices Inc (NASDAQ: AMD)

In my previous newsletter on AMD, I was focused on a possible monthly Stochastic bullish crossover, which ultimately never materialised. This is why I mentioned that crossovers are not confirmed until the candle closes. Following the failed crossover, AMD continued to head lower.

AMD has a 2016 support trendline (in green) and a 1974 trendline (in purple). This time round, the oscillator is heading back into extreme oversold levels and is almost fully reset.

The weekly chart shows AMD in a descending channel consolidation pattern since March. Yes, it’s been 9 months since it made new ATHs. AMD chopped back into the long-term trend in March for the first time since 2022, and is now retesting the same trendline once more. The stock closed with a doji after rejecting the 142.14 resistance level during Friday’s session. Crucially, the weekly Stochastic is close to a bullish crossover. Could this fail? Yes. If that happens, AMD will chop back into the lower channel support, which could see sub 120. Otherwise, I favour a move back into 160s over the next few weeks to retest channel resistance.

The problem with AMD is the daily chart - notice how the Stochastic is already at extreme overbought levels. The key is for bulls to maintain it in this zone, otherwise the weekly signal will fail and AMD will make a third lower low.

In the longer term, if AMD were to hold at this trendline, I am expecting it to make new ATHs above 227.30. Invalidation takes place when AMD breaks below channel consolidation and the 2016 trendline.

Am I willing to risk my free newsletter returns for AMD, a stock that has a negative YTD return? Yes.

Upside PT: 164.46

Invalidation: Loss of 2016 support trendline (in green) and channel support

$Advanced Micro Devices(AMD)$ $NVIDIA Corp(NVDA)$ $Broadcom(AVGO)$ $Qualcomm(QCOM)$ $VanEck Semiconductor ETF(SMH)$

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