Advanced Micro Might Have Hit a Wall

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Advanced Micro Devices has bounced sharply this month, but now the semiconductor stock may have hit a wall.

The first pattern on today’s chart is $116.04, the weekly close from January 10. AMD stalled at that level on February 20 and seems to be halting there again in late March. Has old resistance become new support?

Second, the 50-day simple moving average (SMA) is under the 100-day SMA. Both are below the 200-day SMA. That sequence, with faster SMAs under slower SMAs, is potentially consistent with a downtrend.

Third, stochastics have rebounded to an overbought condition.

Finally, AMD is one of the top underliers in the options market. (It averages more than 300,000 contracts per day, according to TradeStation data.) That could make it easier to position for moves with calls and puts.

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