Rallying AMD is approaching key levels. What's next for the stock, according to chart analysts

Published Wed, Jan 17 20246:09 AM EST

Some closely watched momentum indicators and a bullish overall chart suggest popular AI chipmaker Advanced Micro Devices is headed for new highs in the near future. "It hasn't broken out to a new all-time high yet, but the pattern is bullish, the monthly chart on AMD is bullish, and the semiconductor sector index looks bullish as well," said Dan Wantrobski, associate director of research at Janney Montgomery Scott. "AMD is leading the charge." AMD mountain 2024-01-01 AMD shares over the last year While technical analysts can't specifically pinpoint when that breakout may occur, they note that closely watched moving averages are on the rise, and that's typically regarded as a bullish sign for an asset. Shares finished Tuesday's session up 8.3% to $158.74, a huge move without a clear catalyst other than some bullish analyst commentary. The stock hit a new 52-week high and now sits 3.6% below the stock's all-time high of $164.46 set in the fourth quarter of 2021. Many chart analysts expect the stock to blow past that level in the near future. "Anytime a stock makes a new all-time high, it tells me something special is taking place with the company," said JC O'Hara, chief technical strategist at Roth Capital Partners. He added that strong volume accompanied the price action on Tuesday suggests "major conviction by bulls." AMD mountain 2021-01-18 AMD, 2 years Tuesday's stock breakout seemed to buck the session's overall downtrend that saw the S & P 500 and tech-heavy Nasdaq Composite slump 0.37% and 0.19% , respectively. However, Wantrobski noted that AMD's action aligned with the ongoing uptrend for chip stocks and is in the process of potentially forming a bullish "cup and handle" pattern that could suggest a longer-term uptrend. A buying opportunity is often signaled by that trading pattern that is formed as a stock's price rises, falls to form a base, and then gains once more. Inside Edge Capital's Todd Gordon expects the stock could go as high as $221 this year should it blow past its late 2021 high. To be sure, AMD may not have an easy path toward higher highs. Many anticipate sideways action and a consolidation in the uptrend as quarterly earnings are on deck in the next few weeks, which could add some volatility to the mix. But Oppenheimer's Ari Wald is advising clients to hold positions in anticipation of a broader uptrend. "Investors should be positioned in these risk stocks that typically outperform in a rising market environment and AMD checks that box," he said.