Stock of the day: AMD

In the last Stock of the day analysis of this week we have a real bomb! For the second time, we are going to analyze the AMD and it will be a bomb because the first analysis of this instrument worked out spectacularly. In our previous piece about AMD, written on the 17^th of June, we said:

“A flag is a positive sign and promotes a breakout to the upside. Yesterday’s volatility helped create a long tail on the daily candle, which was bouncing from the lower line of the flag. From a technical point of view, that is a very interesting place to go long, with a very good risk to reward ratio.

If that hasn’t convinced you, a good practice from a price action point of view is to buy when the price breaks the upper line of the flag. For this, you still have to wait but there’s a high chance it will happen.”

It was written, when the price of one share was 80 USD (green rectangle). The price indeed escaped from the flag to the upside and went to 93 USD. Then, we had a small correction and another upswing, which reached the 122 USD mark. That’s a real beauty, right?

Ok, so what’s happening now? The price is in a correction mode, and is currently testing the important Fibonacci level of 38,2%. It can, but does not have to be a good place for a bounce. In case the price goes lower, we have another great spot for buyers and it is the 50% Fibonacci and at the same time, the highs from the end of the 2020 and the beginning of 2021. 

As long as we stay above those two levels, the sentiment is positive and one can think about using them to open long positions.