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Key Takeaways
- AMD shares fell 9% in prolonged buying and selling Tuesday after the chipmaker reported knowledge heart gross sales figures that got here in under Wall Road estimates.
- The inventory has trended sharply decrease inside a descending channel since falling under the 200-day shifting common in October final yr.
- Buyers ought to watch main assist ranges on AMD’s chart round $110, $95, and $81, whereas additionally monitoring a key overhead space close to $130.
Superior Micro Gadgets (AMD) topped Wall Road’s fourth-quarter revenue and income expectations however posted knowledge heart gross sales under estimates, sending the chipmaker’s shares tumbling in prolonged buying and selling on Tuesday.
After-hours promoting intensified when AMD Chief Government Lisa Su mentioned current-quarter knowledge heart gross sales, which is a proxy for the corporate’s synthetic intelligence (AI) chip income, will contract about 7% on a sequential foundation. Whereas Su didn’t present a particular forecast for the corporate’s AI chips, she mentioned she anticipates “tens of billions” of {dollars} in gross sales “within the subsequent couple of years.”
Via Tuesday’s shut, AMD shares had given up a 3rd of their worth over the previous 12 months, weighed down by the chipmaker’s incapability to make inroads into AI favourite Nvidia’s (NVDA) dominance of the profitable AI chip market. The inventory fell 9% to about $109 in after-hours buying and selling.
Beneath, we take a more in-depth have a look at AMD’s chart and use technical evaluation to determine key post-earnings worth ranges price watching out for.
Descending Channel in Focus
Since falling under the 200-day shifting common in October final yr, AMD shares have trended sharply decrease inside a slender descending channel.
Extra not too long ago, the worth has rallied into the sample’s higher trendline forward of the corporate’s earnings report, although the relative energy index (RSI) has did not climb above the 50 threshold, signaling the inventory’s incapability to regain momentum.
Let’s determine three main assist ranges that might come into play amid follow-through earnings-driven promoting and in addition level out a key overhead space which will present resistance throughout countertrend rallies.
Main Help Ranges to Watch
The primary decrease stage to look at sits round $110 close to a trendline that connects a collection of peaks and troughs on the chart between Could and October 2023. Though the inventory is projected to open barely under this worth on Wednesday, it’s price monitoring if the bulls can defend this space in direction of the shut.
A decisive shut under this stage might see AMD shares tumble to round $95. This stage on the chart finds assist from a trendline that hyperlinks the Could 2023 pullback low with outstanding troughs in September and October later that yr.
Additional draw back opens the door for a extra important drop to the $81 stage, which sits about 32% under Tuesday’s closing worth. Cut price hunters might look to accumulate shares on this location close to the pronounced Could 2023 swing low.
Key Overhead Space to Monitor
Upon a countertrend rally within the inventory, traders ought to maintain monitor of the $130 stage. This area could present promoting stress close to a multi-year horizontal line that joins a number of peaks and troughs on the chart from Could 2023 to January this yr.
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