Watch These AMD Inventory Value Ranges After Submit-Earnings Plunge



Key Takeaways

  • AMD shares fell 9% in prolonged buying and selling Tuesday after the chipmaker reported information heart gross sales figures that got here in under Wall Avenue estimates.
  • The inventory has trended sharply decrease inside a descending channel since falling under the 200-day transferring common in October final yr.
  • Buyers ought to watch main help ranges on AMD’s chart round $110, $95, and $81, whereas additionally monitoring a key overhead space close to $130.

Superior Micro Units (AMD) topped Wall Avenue’s fourth-quarter revenue and income expectations however posted information heart gross sales under estimates, sending the chipmaker’s shares tumbling in prolonged buying and selling on Tuesday.

After-hours promoting intensified when AMD Chief Govt Lisa Su mentioned current-quarter information heart gross sales, which is a proxy for the corporate’s synthetic intelligence (AI) chip income, will contract about 7% on a sequential foundation. Whereas Su didn’t present a particular forecast for the corporate’s AI chips, she mentioned she anticipates “tens of billions” of {dollars} in gross sales “within the subsequent couple of years.”

By Tuesday’s shut, AMD shares had given up a 3rd of their worth over the previous 12 months, weighed down by the chipmaker’s incapacity to make inroads into AI favourite Nvidia’s (NVDA) dominance of the profitable AI chip market. The inventory fell 9% to about $109 in after-hours buying and selling.

Beneath, we take a better have a look at AMD’s chart and use technical evaluation to establish key post-earnings worth ranges value watching out for.

Descending Channel in Focus

Since falling under the 200-day transferring common in October final yr, AMD shares have trended sharply decrease inside a slender descending channel.

Extra not too long ago, the worth has rallied into the sample’s higher trendline forward of the corporate’s earnings report, although the relative energy index (RSI) has didn’t climb above the 50 threshold, signaling the inventory’s incapacity to regain momentum.

Let’s establish three main help ranges that might come into play amid follow-through earnings-driven promoting and likewise level out a key overhead space which will present resistance throughout countertrend rallies.

Main Help Ranges to Watch

The primary decrease stage to observe sits round $110 close to a trendline that connects a sequence of peaks and troughs on the chart between Could and October 2023. Though the inventory is projected to open barely under this worth on Wednesday, it’s value monitoring if the bulls can defend this space in the direction of the shut.

A decisive shut under this stage might see AMD shares tumble to round $95. This stage on the chart finds help from a trendline that hyperlinks the Could 2023 pullback low with outstanding troughs in September and October later that yr.

Additional draw back opens the door for a extra important drop to the $81 stage, which sits about 32% under Tuesday’s closing worth. Cut price hunters might look to accumulate shares on this location close to the pronounced Could 2023 swing low.

Key Overhead Space to Monitor

Upon a countertrend rally within the inventory, traders ought to preserve monitor of the $130 stage. This area might present promoting stress close to a multi-year horizontal line that joins a number of peaks and troughs on the chart from Could 2023 to January this yr.

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As of the date this text was written, the writer doesn’t personal any of the above securities.

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