Stock of the day: AMD

The stock market takes no prisoners. Yesterday’s session ended with a deep red color. At the beginning of today’s European session, traders tried to initiate a small reversal, but my wild guess is that it can only be considered a dead cat bounce.

In today’s piece, we have a very handsome bearish occasion on AMD, a company we’ve mentioned a few times on here, the last time being on April 20^th. Back then we said:

“As you can see, it already broke the neckline of this pattern (blue), which in theory should give us a proper sell signal. As long as the price stays below the blue area, sentiment is negative. If the price climbs back above the blue resistance, it would cancel the sell signal and open up a buy signal, but this scenario is currently less likely to happen.”

For the next few days AMD’s price went down, so that was definitely a great call. By the beginning of May, buyers had decided to test the neckline of the H&S formation again. The test was great for sellers, as the price bounced leaving no doubts for technical traders. Yesterday was especially important, as we ended up with a long bearish candle – the neckline was definitely rejected.

With all that an H&S is in play and a major sell signal is ON. The first target is on the 73 USD (orange) mark but if the bear market will continue, we can go much below that.