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AMD - Potential Head & Shoulders Pattern?

by Tim Straiton
Tuesday 30th March 2021

Current price of Advanced Micro Devices Inc. is $77.14, trading 6.19% below its rising 40 week moving average of $81.91. This stock is currently trading at over 30 times next year's earnings projections which is arelatively high valuation. Plans to acquire Xilinx will require the company to issue a large amount of stock in order to pay for the transaction, thus diluting current shareholder holdings.

The technical outlook for this company reveals a potential head and shoulders pattern which could now be forming and the next few weeks could see the right shoulder taking shape where prices could recover towards the $85-$87 area. A break of the neckline at $74.93 would signal the conclusion of this head and shoulders pattern and open downside potential to the 61.95 level which is the Fibonacci 61.8% downside projection level based on the $74.93 - $95.92 range.


 

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