The Best Advanced Micro Devices Shares See Big Demand
A gain of 80.01% in 2019 for shares of Advanced Micro Devices, Inc. (AMD) tells the story of a winning stock along with a lot of unusual trading activity. It is bullish activity because stocks are headed higher in rising volumes, indicating that a buyer is involved.
Over time, we have learned how stocks with a history of solid fundamentals tend to rise in price. Smart money managers are always looking to bet on the next outlier stocks … the best in its class. In fact, I wrote about AMD in April, when I noticed the same activity. You can read that article HERE. The shares have risen 14.23% since that post.
The main criteria we look for when betting on the upside are a history of solid fundamentals, solid technical and great buying potential in the shares. I’ll get into the fundamental picture later, but the real information about a stock’s short-term trajectory lies in the trading activity of the shares. Simply put, it’s about supply and demand. When demand is higher than supply, the stock rises. When demand is lower than supply, stocks fall. For most of 2019, AMD has been in an uptrend accompanied by unusual buy signals. It’s about stacking the odds in your favor.
For Mapsignals, when we look for an entry into a leading stock, we want to see an increase in potential purchase. Just to graphically show you what our unusual signals of trading activity look like, take a look at all the unusual institutional signals (ICOs) that AMD shares have made over the past year. As of this year, there have been days when the shares seem to have had a buyer. This is notable because stocks move based on supply and demand. What is really catching our attention now is the recent ICO purchase. You can also see how 2018 had many of these signs:
Chart showing unusual institutional signals (ICOs) made by Advanced Micro Devices, Inc. (AMD)
Data encoding method:
In 2019, AMD recorded nine unusually high-volume days, indicating the purchase of shares starting in January. 31, 2019 (see chart above). This points to AMD’s shares gaining in an unusual way, suggesting that demand for shares is increasing.
If you are going to make a bet in the direction of a stock, it is wise to pay attention to how the shares are traded. Just as you do not want to fight the trend, you also do not want to fight an action that shows the price increase along with an increase in the traded volume. Someone could be accumulating a position.
The goal of Mapsignals is to identify the main actions of Tomorrow Today. We are basically looking for atypical companies with healthy fundamentals accompanied by unusual institutional business activity. By studying these data points, we can make an educated guess about which equity institutions are trafficking and marry this information with fundamentally sound companies. We want the odds on our side in the pursuit of higher quality stocks.
When we decide on a strong candidate, we consider past leaders who have a track record of technical superior performance. When they show leadership, we see these as opportunities. The following are some areas where AMD’s actions have captured our attention year to date:
YTD outperforms the market: + 63.88% vs. SPDR S & P 500 ETF (SPY)
YTD outperform vs. sector: + 55.43% vs. Technology Select Sector SPDR Fund (XLK)
Recent bullish unusual trading signals
Now, we take it a step further and write down the best stocks that show unusual trading activity. Below you can see the historical times since 2018 when AMD made the top 20 report for Mapsignals. These are the highest rated signals in our stock universe. Clearly, we caught the big lead-up to 2018. That’s exactly what our process is designed for. We even ventured to call this action an outlier:
Chart showing the most valued buy signals made by Advanced Micro Devices, Inc. (AMD)
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In addition to a technical image that is strong, one should also look under the hood to see if the fundamental image supports a long-term investment. AMD and other high-quality semiconductor companies are coming off a tough year of earnings.
Year-on-year gross margin expansion for Q1 2019 :+ 5 percentage points
Second quarter 2019 guidance, sequential revenue growth rate: + 19%
AMD is bursting recently along with other semiconductor stocks. We believe that the current level of stocks is in position for further upside. The narrative for Advanced Micro Devices and other semiconductor companies is one of returning to growth. We are always on the lookout for large companies that show the usual trading activity in stocks. The best companies tend to have a higher trend in the long run. All this points to a long-term opportunity for action.
AMD represents a possible buying opportunity for the long-term investor. Given the rise in price, growing fundamentals and recent unusual buy signals, this action might be worth a place in a growth-oriented portfolio.