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Watch These AMD Stock Price Levels After Post-Earnings Plunge

Source: TradingView.com
Beginning: TradingView.com

Key Takeaways

  • AMD shares fell 9% in extended trading Tuesday after the chipmaker reported data center sales events figures that came in below Wall Street estimates.
  • The stock has trended sharply lower within a declining channel since falling below the 200-day moving average in October last year.
  • Investors should take note major support levels on AMD’s chart around $110, $95, and $81, while also monitoring a key overhead area close to being $130.

Advanced Micro Devices (AMD) topped Wall Street’s fourth-quarter profit and revenue expectations but posted data center sales underneath estimates, sending the chipmaker’s shares tumbling in extended trading on Tuesday.

After-hours selling intensified when AMD Chief Regulatory Lisa Su said current-quarter data center sales, which is a proxy for the company’s artificial intelligence (AI) chip proceeds, will contract about 7% on a sequential basis. While Su did not provide a specific forecast for the company’s AI chips, she told she anticipates “tens of billions” of dollars in sales “in the next couple of years.”

Through Tuesday’s close, AMD shares had postulated up a third of their value over the past 12 months, weighed down by the chipmaker’s inability to make encroachments into AI favorite Nvidia’s (NVDA) dominance of the lucrative AI chip market. The stock fell 9% to about $109 in after-hours profession.

Below, we take a closer look at AMD’s chart and use technical analysis to identify key post-earnings price levels worth gaze at out for.

Descending Channel in Focus

Since falling below the 200-day moving average in October last year, AMD slices have trended sharply lower within a narrow descending channel.

More recently, the price has rallied into the figure’s upper trendline ahead of the company’s earnings report, though the relative strength index (RSI) has failed to climb chiefly the 50 threshold, signaling the stock’s inability to regain momentum.

Let’s identify three major support levels that could clock on into play amid follow-through earnings-driven selling and also point out a key overhead area that may provide intransigence during countertrend rallies.

Major Support Levels to Watch

The first lower level to watch sits circa $110 near a trendline that connects a series of peaks and troughs on the chart between May and October 2023. Although the everyday is projected to open slightly below this price on Wednesday, it’s worth monitoring if the bulls can defend this court towards the close.

A decisive close below this level could see AMD shares tumble to around $95. This tied on the chart finds support from a trendline that links the May 2023 pullback low with prominent troughs in September and October later that year.

In addition downside opens the door for a more significant drop to the $81 level, which sits about 32% inferior Tuesday’s closing price. Bargain hunters could look to accumulate shares in this location near the clear-cut May 2023 swing low.

Key Overhead Area to Monitor

Upon a countertrend rally in the stock, investors should keep sniff out of the $130 level. This region may provide selling pressure near a multi-year horizontal line that welds multiple peaks and troughs on the chart from May 2023 to January this year.

The comments, opinions, and analyses extracted on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was canceled, the author does not own any of the above securities.

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