Stock of the day: AMD

In today’s piece, we are coming back to AMD, which we’d previously analysed on August 20^th. Back then, the price was going lower in the short term but the long term was still positive. We highlighted two interesting places where buyers could have been looking for the support:

“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”

As expected, the correction continued and the price indeed reached the second support around 50% Fibonacci. As you may assume, this area worked like a charm and was used by the buyers to stop the correction and initiate another bullish wave.

The whole correction was very technical. The price created a wedge pattern (orange) and the real buy signal comes from the fact that we broke the upper line of the wedge. In addition to that, the price broke the short-term horizontal resistance at 107.7. With all this in mind, the sentiment now is definitely positive