The Best AMD Could See Some Profit Taking After Big Climb

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Advanced Micro Devices, Inc. Shares of (AMD) fell more than 4% in early trading following their significant rise in the last seven sessions. The introduction of the Radeon Pro V340 graphics card greatly increased the stock with its advanced security features and promised to address high-visualization workloads for the data center markets. Intel Corporation’s (INTC) problems with its 10-nanometer (nm) chip could also create a window of opportunity for AMD to capture greater market share in key segments.

Last week, Rosenblatt analysts raised their price target on AMD shares from AM 27.00 to.30.00 per share, representing a premium of more than 40% to the current price at the time. Analysts believe the company could see double-digit growth in the coming years given its many tailwinds, citing positive meetings of institutional investors that could keep capital flowing into stocks. Many other analysts have also been optimistic about the name. (See also: AMD’s shares could double in the coming months.)

Technical table showing the performance of Advanced Micro Devices, Inc. AMD shares (AMD)
From a technical point of view, stocks are trading at overbought levels, with the Relative Strength Index (RSI) trading above 75.00 in recent sessions. The Moving Average Convergence Divergence (MACD) seems to support this uptrend, but traders could see some profit taking in the near term. An enveloping bearish potential on Tuesday would confirm these trends and set the stage for a sideways or lower move ahead.

Traders should be on the lookout for some consolidation above R2 and trendline support levels at $ 23.19. If the stock breaks from these levels, traders could see a lower move to R1 support at alrededor 20.67 or trendline support at around $ 19.50. If the stock bounces off these levels, traders should be on the lookout for a break to new highs, but that scenario seems less likely in the near term given the bearish move.


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