AMD stock price goes parabolic: Is $150 a possible short-term target?

Summary:

The AMD stock price is seemingly unstoppable. But can Advanced Micro Devices keep up the dizzying rate of ascent? The chart says it just might.

The AMD stock price is seemingly unstoppable. But can Advanced Micro Devices keep up the dizzying rate of ascent? The chart says it just might.

Advanced Micro Devices Inc (NASDAQ: AMD) extended its winning streak to six consecutive days, finishing Wednesday at $118.77 (+5.52%)

AMD has started in August in the same way it ended last month. However, the 18%, three day gain has already eclipsed July’s 13% return. The recent price appreciation is even more impressive when you consider the stock has risen more than 230% from the March 2020 low.

The fact this has been possible during a global semi-conductor shortage speaks volumes of the firms’ prospects.

AMD’s alliance with Taiwan semi-conductor has been vital in navigating the supply bottleneck. As a result, the company’s latest quarterly sales figures were almost three times those of the same period last year. Furthermore, AMD predicts the second half of 2021 will prove lucrative, increasing its revenue forecast to a 60% improvement YoY.

But possibly the biggest boost for the AMD stock price came on the revelation that it is gaining market share from Nvidia.

Not to mention, the rival’s takeover of British chipmaker ARM holdings may be on the rocks.

So clearly, the fundamentals for the stock are strong, but the rally has taken the price vertical. And the biggest question is will it continue?

Technical Outlook

The first thing you see when looking at the daily chart is a clear ascending trend channel.

The trend from 2018 has provided both support and resistance over the last three years.

Notably, the reversal from the trend support at $72 in May, has lifted the price above the 50, 100, and 200-day moving averages. Furthermore, the 50 DMA at $88.42 has completed a bullish crossover of the 200 at $85.63.

Furthermore, the ADM stock price advanced beyond the previous all-time high at $99.23 and set a new record every day this week.

If the trend channel stays true, the optimistic target becomes the top end of the pattern at $150.

The bullish outlook stays intact as long as AMD remains above the 200 DMA and the trend support at $83.50. A close below this level would indicate a bearish breakdown and invalidate the bullish call.