When and how to safely buy AMD shares for profit

<p>In today’s largest non-market battle, it is still possible to win. But when it comes to the semiconductor store Advanced Micro Devices (NASDAQ: AMD), the voices will be strong for the bull falls during a “super” Tuesday for AMD shares.

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It’s a big day, if not the make-or-break day for the last remaining Democratic candidates, with the multi-state Super Tuesday primary finally here. And for investors, regardless of their preferred presidential election, eliminating this uncertainty and who wins may not come fast enough. Yet in the polls that cross Wall Street and the price chart, the AMD stock is a technical candidate that already looks like the real deal for bullish investors.

In the middle of a quieter session after Monday’s ground win of bulls and last week’s decisive five-day win from the bear camp, Advanced Micro Devices is up by about 3.5% intraday Tuesday. What is more and more important is that shares show market leadership for a couple of very good reasons.

Outside the price chart, AMD shares benefit from a bullish upgrade from the Piper Sandler investment house. The company raised its rating on the stock from neutral to overweight and raised its price target by almost 25% from $ 45 to $ 56. Compared to Tuesday’s intraday market price of $ 49.35, the recommendation provides a return of 14% over the next 12 months.

Supporting the upgrade Piper’s Harsh Kumar was optimistic about AMD‘s increasingly strong and well-positioned product line-up over the next few years. Short-term risks due to COVID-19 required the company to reduce its estimates. In addition, the company felt compelled to raise its long-term stock forecasts in light of Advanced Micro’s competitively priced chips that would enable “significant growth” and capture market share in laptops, desktops and the data center market against chip giant Intel (NASDAQ: INTC).

AMD Stock Weekly Chart

Source: Chart of TradingView

Apart from Tuesday’s market-leading gains, the AMD share shows at that weekly price the kind of determination that can lead to a long-term victory for bullish investors. Last week’s broad bearish trend sent equities to a Fibonacci challenge and price support. And while there is still work to be done, the expectation is that a meaningful bottom is nearby and well positioned to buy.

Of technical interest in the bull fall is Advanced Micro Devices’ combined testing of its previous high of 2000, a 50% to 62% retracement of September’s double bottom in a major uptrend and challenge for a key high dating back to 2006. So, what exactly needs to happen next in AMD before a purchase looks more appealing? Not much in our opinion, but it is definitely important.

A vote or recommendation is that investors wait for last week’s volatile but bullish doji candlesticks to form around this critical support area to be confirmed. This strategy requires that the shares be raised by $ 51.24 before a purchase is made. I would also recommend smaller position size to meet the larger potential draw of the pattern if the candlestick finally fails.

Alternatively, if the doji has not signaled but remains intact because stochastics signal a bullish crossover in the coming days, I would also give a nod to a purchase of Advanced Micro Devices shares. In our view, this type of combined action should also enable investors to buy stocks with increased confidence that AMD‘s rigid but fairly healthy and regular 30% correction is the real deal, beyond what looks like a “” super “Tuesday.

Disclosure: Investment accounts managed by Christopher Tyler and currently hold positions in Advanced Micro Devices (AMD) and its derivatives, but no other securities are mentioned in this article. The information provided is based on Christopher Tyler’s observations and is intended for educational purposes only; whose use is the responsibility of the individual. For additional options-based strategies, related considerations or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits.

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