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How, When and Why to Buy Advanced Micro Devices Stock Again

Chris Tyler

There’s a trade pause in the news and Advanced Micro Devices (NASDAQ:AMD) bulls continue to win the war on and off the price chart. All of this is setting up another nice long opportunity in AMD stock. Here’s why:

AMD Stock: How, When and Why to Buy Advanced Micro Devices Again

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This week has started off on a solid and well-supported footing for Wall Street following upbeat trade war news between the U.S. and China from the G-20 Summit. And semiconductor stocks like AMD stock are faring even better.

The Vaneck Vectors Semiconductor ETF (NYSEARCA:SMH) is adding 3.85% and demonstrating relative strength as the industry’s revenues rely heavily on business with China. And for its part, shares of AMD have jumped significantly.

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Importantly, the U.S. government’s ban against China’s Huawei has been eased as part of the latest agreement. The company remains on a trade blacklist, but U.S. technology firms can sell products such as semiconductors, which don’t pose a national security risk, to Huawei.

Ironically, this past Friday, AMD stock came under modest pressure following a report it had improperly transferred sensitive, microprocessor technology to some of its Chinese partners in 2016. Advanced Micro Devices quickly pushed back with evidence it followed all protocols and received permission from the U.S. Commerce Department regarding the shared technology within the joint venture.

Hmm … “fake news” anyone?

I’ll let readers reach their own conclusion regarding Friday’s AMD stock story.

The fact is Advanced Micro Devices continues to do great and impress with its business gains. Most recently, last Thursday AMD stock received a fresh buy recommendation from Wedbush. The investment firm sees AMD’s “early adoption of a distributed chiplet” architecture combined with a shift to leading-edge geometries positions capable of taking meaningful market share in both the PC and server markets from rival Intel Corporation (NASDAQ:INTC).

The other fact is the current price action looks like the latest opportunity for AMD stock bulls to go long and profit from a friendly trend.

AMD Stock Weekly Chart


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Monday’s bid in AMD stock has confirmed a pullback formed over the past couple weeks after shares narrowly hit fresh relative highs in early June. Bears are likely to see the recent high as a pattern double top and resistance until overcome. I prefer to remain optimistic of AMD’s uptrend.

At the end of the day, or in this case, the end of the week, Advanced Micro shares found support around recent lateral price congestion and with Monday’s price action, have now confirmed a new pivot low within AMD stock’s bullish trend.

One flaw with buying AMD stock today is the weekly stochastics. Currently, the indicator is in neutral territory and hasn’t yet signaled a bullish crossover. With shares less than 2% above last week’s candlestick pivot high and otherwise in a buyable position, my recommendation is to put AMD on your watch list for purchase once stochastics fully affirms today’s price action.

Disclosure: Investment accounts under Christopher Tyler’s management currently own positions in Advanced Micro Devices (AMD) and its derivatives, but no other securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits.

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