Is AMD's recent rally coming to an end?Perhaps.
AMD has rallied for the past 8 trading sessions. The first session was on January 6 and ended with a key reversal (new low, closed near the high). Today, another key reversal has occurred (new high, closed on the low). This would indicate that AMD is likely to reverse direction and head lower. I'm going to say it will reach 64 by the end of January or sometime in February. I'm usually a bit too optimistic, so I'm giving myself some breathing room.
AMD tends to correlate with Invesco's QQQ ETF which is heavy in technology stocks, so I often check to see if QQQ is leading the way. As it turns out, QQQ had an even more prominent key reversal today. To me, this just confirms what I think is going to happen.
Of course, I could be wrong. Not all key reversals work the way you want them to (see the red dots in November).
We have just reached a 2-year-old support level that may now become a resistance level between 72.80 and 73.75 (the thick blue line and thin black line). I will be watching closely. If AMD doesn't respect the key reversal, it could break through that area and revisit it a few times like it did in November and December.
Disclaimer: I am not a financial advisor, and the above statements are not investment advice. My comments are only intended for educational purposes. You are solely responsible for your own trading decisions.
