Hi Lou,
Can you let me know what you think of AMD. Some "experts" think that it could go as high as $10.00 by the end of this year.
Thanks and keep these e-mails coming.
Cheers,
Bob
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Hey Bob,
Thanks for the assignment. This will be the third time that I examine the patterns and trends associated with the shares of Advanced Micro Devices Inc. (AMD NASDAQ). The last analysis was conducted on December 13, 2013 on a request from George. The shares were trading for $3.69 and he wanted another opinion on the prospects for the stock.
The research indicated that AMD was dealing with a long-term downtrend and that it was meeting resistance near $4.00. The MACD and the RSI were not providing much in the way of buy or sell signals. It was advised to monitor the stock to see if it could break above $4.00 with conviction and start a new uptrend.
Unfortunately that was the right call. The stock failed to move substantially higher before retreating to a 52-week low of $1.61 in July of 2015.
An audit of the charts will provide the basis for this update.
Desktop users click on image to enlarge
The three-year chart indicates that AMD has been selling off since July of 2014. In addition, a death cross formed in October of 2014, which the knowledgeable investor would have interpreted as evidence of continued selling pressure.
The share did catch a bounce off the 52-week low and ran to $3.00, where it took a hit on an industry report that semiconductor sales were down 3.5% year-over-year in November of 2015.
Desktop users click on image to enlarge
The six-month chart provides a close-up of the selling that started as we came into 2016. The retreat has taken the shares down through the 50-day moving average, where they are testing support near $2.30. Worth noting is the RSI that signalled an overbought condition in late December of 2015 and the MACD bending lower concurrently.
At this point I would advise patience until we see the sellers washed out and buyers regain control of the market. As far as the call for $10.00 a share, I would say its a case of in time but not at this time.
Next time I will undertake a comparative analysis of Denison Mines Corp. (DML TSX) and Fission Uranium Corp. (FCU TSX) for Todd.
Make it a profitable day and happy capitalism!