-- AMD stock filled the gap and is trying to find support. Here is the trade now. --
By Bret Kenwell, TheStreet.com
Shares of Advanced Micro Devices (AMD) have been struggling, and the bulls are hoping the stock soon finds its footing.
The shares are down four weeks in a row, a streak AMD stock can snap with a 2.4% rally on Friday.
On Thursday, the stock was down 8% at one point and closed lower by 5.6%. The earnings reaction from Micron (MU) didn't seem to help matters, nor did the broader market decline.
A few observations regarding AMD:
None of those observations are bullish for AMD stock, even if the shares are becoming attractive on a valuation basis.
Daily chart of AMD stock
Chart courtesy of TrendSpider.com
The stock at one point lost nearly half its value, dropping to $55 from $105. It found support just below the prior breakout level at $59 and the 21-quarter moving average.
With yesterday's flush, AMD stock filled the gap at $63 and found support near the 61.8% retracement. Now it's once again trying to find its footing, and the bulls are hopeful for a bounce.
They may get one, but until AMD stock can clear the 10-day and 50-day moving averages, it may be nothing more than that - a bounce.
Currently, AMD stock doesn't appear able to sustain an uptrend until it reclaims those key measures.
If it can clear those levels and close above the $70 to $72 area, then $80 is back in play, along with the 200-day moving average.
Weekly chart of AMD stock
Chart courtesy of TrendSpider.com
Longer term, the trend still looks precarious for the bulls.
The shares momentarily reclaimed the $73 to $74 area, which was previous support over the past several years.
While the daily chart is more nuanced than the weekly, the latter seems to suggest another test of the $59 area and the 21-quarter moving average.
If selling pressure persists, the low near $54.50 is likely in play, followed by $50.
From TheStreet.com