Key Takeaways
- AMD shares fell 9% in prolonged buying and selling Tuesday after the chipmaker reported information middle gross sales figures that got here in beneath Wall Road estimates.
- The inventory has trended sharply decrease inside a descending channel since falling beneath the 200-day shifting common in October final 12 months.
- Buyers ought to watch main assist ranges on AMD’s chart round $110, $95, and $81, whereas additionally monitoring a key overhead space close to $130.
Superior Micro Gadgets (AMD) topped Wall Road’s fourth-quarter revenue and income expectations however posted information middle gross sales beneath 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 middle 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.”
Via 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.
Under, we take a more in-depth have a look at AMD’s chart and use technical evaluation to establish key post-earnings value ranges value watching out for.
Descending Channel in Focus
Since falling beneath the 200-day shifting common in October final 12 months, AMD shares have trended sharply decrease inside a slim descending channel.
Extra lately, the value 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 assist 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 Assist 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 beneath this value on Wednesday, it’s value monitoring if the bulls can defend this space in the direction of the shut.
A decisive shut beneath this stage may see AMD shares tumble to round $95. This stage on the chart finds assist from a trendline that hyperlinks the Could 2023 pullback low with distinguished troughs in September and October later that 12 months.
Additional draw back opens the door for a extra vital drop to the $81 stage, which sits about 32% beneath Tuesday’s closing value. Discount hunters may look to build up 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 hold monitor of the $130 stage. This area might present promoting strain close to a multi-year horizontal line that joins a number of peaks and troughs on the chart from Could 2023 to January this 12 months.
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