Advanced Micro Devices Inc. CEO Hector Ruiz delivers his keynote at the Oracle Open World conference in San Francisco, in this Monday, Nov. 12, 2007 file photo.Paul Sakuma/The Associated Press
Hi Lou,
Could you please analyze AMD? The new Xbox and PlayStation 4 consoles are being released soon, both will be using AMD CPUs.
Still unsure if I should invest, though.
Thanks in advance!
Joe
Hey Joe,
Thanks for the assignment.
Advanced Micro Devices Inc. supplies central processing units and graphics processing units to the global computer sector. They have competition in both spaces and are still chewing down on the debt that they strapped on in 2006, paying $5.4-billion to acquire ATI Technologies. They have also run into headwinds in the transition in consumer demand towards mobile devices, such as smart phones and tablets, and away from personal computers.
A study of the charts will help inform your decision regarding how to proceed with AMD.
The three-year chart depicts the retreat that started in April of 2012 when the shares were trading over $8.00. The decline took the stock down to a 52-week low of $1.81 in November of 2012 where it caught a bounce and headed to a 52-week high of $4.65 on July 18, 2013. Currently the advance has met resistance at $4.00.
The next flex point will come on Oct. 17 when the company is scheduled to report its third-quarter results. The reason to make a point of watching for the release quarterly results is that the lift in April of 2013 came on a beat of forecast for the first quarter and the pullback in July, 2013 started on release of second quarter. To be forewarned is to be forearmed.
The six-month chart indicates that there are few signals suggesting a buy at this time. The move higher in September was signalled by the MACD and the RSI lifting the shares above the 50-day moving average. Currently the momentum indicators are both running flat while the shares have been knocking at the door of resistance that has formed at $4.00 but have failed to break above it convincingly.
It would be advised to track AMD to the third-quarter release on October 17 and see what the signs along the trail are telling us. At this time I believe the message is be patient.
Make it a profitable day and happy capitalism!
Have your own question for Lou? Send it in to lschizas@globeandmail.com.
Lou Schizas