Don't Ignore This Chart!

AMD Completes Right Side Of Cup

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Advanced Micro Devices (AMD) was one of the best performing stocks in 2016 and the bullish pattern that's printed in the first five weeks of 2017 suggests the rally hasn't ended just yet.  One bearish development today was that AMD broke out above its late December high on an intraday basis, accompanied by extremely heavy volume, only to fail to hold it into the close.  Those late day sellers may be setting AMD up for some short-term weakness back to test its rising 20 day EMA to complete a handle.  Here's the current technical picture:

The rising 20 day EMA is just beneath 11.00 and could serve as solid support if a handle prints during a period of profit taking.  The RSI has reached overbought territory at 70 and Thursday's failure on its breakout attempt could be a short-term signal of further selling before a breakout confirms.  AMD certainly had the volume to confirm today's breakout as volume the past two days has been surreal (blue circle above).  Despite the failure of AMD to breakout on an absolute basis, the stock did breakout relative to the benchmark S&P 500.  AMD remains very strong technically.

Happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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