Advanced Micro Devices (AMD) spent over a year with its SCTR among the highest of all individual stocks. It was an impressive rally for sure as its stock price rose from below $2 to above $15 in 13 months. But even the hottest stocks need to evenually consolidate to unwind perpetually overbought conditions. AMD has been doing that, frustrating thousands of traders. I don't believe this bullish story is over yet. In fact, I view the consolidation as a very bullish ascending triangle pattern with volume picking up today to perhaps close at a 2 1/2 month high by 4pm EST. We'll see. In the meantime, I fully expect to see AMD challenge its double top and triangle resistance as shown below on this weekly chart:
Over the past 2-3 weeks, the SCTR has skyrocketed back above 80 and when AMD finally makes its ascending triangle breakout, I suspect that its SCTR will move back up into the high 90s as AMD regains its leadership role on the NASDAQ.
Happy trading!
Tom
