AMD stock was on fire in 2021, but cooled off coming into 2022. Let’s look at Monday’s dip, which appears to be a buying opportunity.
Shares of Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report finally felt the pinch and have been selling off.
Including today, shares are down in four of the past five sessions, with its lone gain — from Thursday Jan. 6 — coming in at just 0.06%.
With today’s dip, AMD stock is working on its third straight weekly decline and seventh weekly decline in the last eight weeks. At Monday’s low, shares were down 24% from the 52-week high.
At one point, Nvidia (NVDA) – Get NVIDIA Corporation Report and AMD were the two growth stocks that could do no wrong.
Both shares were racing higher and registering monstrous gains despite the turmoil taking place in growth stocks.
However, the selling pressure finally caught up with these names, even as they looked good going into year end.
For many investors though, these types of selloffs simply create opportunity. Are we seeing that opportunity in AMD stock now? I think so.
Trading AMD Stock
Four-hour chart of AMD stock.
Chart courtesy of TrendSpider.com
Above is a four-chart of AMD stock with some weekly measures overlaid to help show both the short-term and long-term trends.
You’ll notice that Monday’s dip doesn’t come with any bullish divergence on the RSI. That’s too bad — it would have been a nice catalyst to add to our setup.
That’s okay though, because there are several others.
For starters, they include the 200-unit moving average on the four-hour measure, which hasn’t been touched since June. Additionally, there’s also the 21-week moving average, alongside the weekly VWAP measure.
Finally, there’s also the two daily highs from the company’s October earnings report. AMD blew the estimates out of the water, but after such a robust rally, the stock needed a break before rallying further.
That’s how we ended up with these highs near $127 to $128.
Between this level of interest, the various moving averages on multiple timeframes and the weekly VWAP measure, we have enough catalysts to warrant a long position here.
Especially if bulls want to be ultra conservative and use today’s low as their stop. Presently, that’s risking just over $3 a share and looking for a move much larger than that to the upside.
I would love to see a push back up to the $137 to $138 area, then the major moving averages north of $140.
On the downside, there is now a pretty clear low to measure against from Monday.
