Chipmaker Advanced Micro Devices (AMD) has been steadily sliding down the rankings in the SIA S&P 100 Index Report since peaking back in June, exiting the green zone and recently returning to the Red Unfavored Zone for the first time since May. Yesterday, AMD finished in 58th place, down 12 positions in the last month.
AMD has been underperforming relative to other companies in the Electronics and Semiconductors sector, Broadcom (AVGO) and Nvidia (NVDA) both remain in the top 10 stocks in the Green Favored Zone of the same report. Advanced Micro Devices (AMD) started the year off strong, breaking out of a downtrend and recapturing lost ground. Over the summer, however, this rally ran out of gas. Since faltering near the $130.00 level, AMD has come under renewed distribution, establishing a new downtrend of lower highs, and snapping an uptrend line. A break below the $100.00 round number would confirm the start of a significant downswing.
Next potential downside support may appear at a flatter downtrend line near $90.00, or previous lows closer to $75.00. Initial resistance appears at the current downtrend resistance line near $110.00.
A key technical test for Advanced Micro Devices (AMD) shares appears to be underway at the $100.00 round number, which has pivoted from support to resistance and back again several times over the last two years. After rallying through the first half of the year, AMD peaked at a lower high back in June and retreated through the summer, staging bearish Double Bottom and Spread Double Bottom breakdowns.
A break below $100.00 would not only confirm the start of a new downleg, it would suggest that the previous rally was a correction within a larger downtrend that started in late 2021. If so, next potential downside support may appear near $90.55 based on a vertical count, or $77.30 based on a horizontal count.
If $100.00 support is to hold, however, it would suggest that the recent retreat is a correction within an uptrend that started at the October 2022 market bottom. Initial resistance on a bounce appears near $110.40 based on a 3-box reversal, then $119.40 near a downtrend resistance line and a previous column high.
With a bearish SMAX score of 4, AMD is exhibiting weakness against the asset classes.
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