AMD Earnings Breakout or Breakdown??

30 Eki 2023

With Q3 '23 earnings set for tomorrow 10/30/23 AMD is perfectly positioned for a huge move to either the downside or the upside. Stock has traded in a descending channel since experiencing a meteoric rise after reporting Q1 '23 earnings, ultimately setting a high-water mark of $132.83 on 06/13/23. Overall Market has been in a downward trend and many stocks are trading at critical levels of support. Earnings trend has been to run up on good results in the pre and after markets, only to show weakness during the trading session. TNX, DXY, and VIX are all trading at heightened levels and due for a pullback possibly opening the door for stocks to go higher. However, current macro-economic data and social/political events could drive markets lower.

Bull Case

1. Strength above red Ascending Support Trendline

2. Strength at the bottom of the Descending Channel(D).

*Possible DBL BTM forming at Key Level that coincides with the bottom of the Descending Channel(D), Ascending Support(D)(Red Trendline), and the Golden Zone(Yellow Rectangle) of a Fib Retracement from the 52wk Low to the high-water mark made after earnings.

*AVWAP(52wk Low) adding additional confluence to the area.

3. Break above the 200MA(D), 50MA(D), and 100MA(D)

*Stock is currently trading below all three.

4. Break above Descending Channel(D)

5. Bullish price action, candlesticks, or chart patterns inside the Golden Zone.



Bear Case

1. Rejection of the 200MA(D), 50MA(D), or 100MA(D)

*Stock is currently trading below all three.

2. Weakness below Ascending Support(D)(Red Trendline)

*A break below the AVWAP(52wk Low), Key Level, or the VAL(AVP)(52wk Low) would be strong confirmation of further downward pressure.

3. Break below the bottom of the Descending Channel(D) 


Awareness Category

1. Stock is trading at the bottom of the Bollinger Bands.

2. Chart is set to confirm a DBL BTM or DBL TOP. Follow the trend.

3. RSI(D) is oversold however, it may have formed a DBL BTM signaling a reversal.

4. Market continues to exhibit signs of distribution, resulting in huge swings in both directions.

30 Eki 2023

Not

*Correction
Posted a day early.
Earnings Date: 10/31/2023

SN: Price action on 10/30/23 consistent with thesis statement.

30 Eki 2023

Not

Will begin looking for high probability setups in either direction after earnings report is released.

1 Kas 2023

Not

Earnings were released today, and AMD beat on both earnings per share and revenue. Although this is good news it guarantees nothing. This was just a necessary hurdle for the stock to clear before price action can continue. Today's price action leading into earnings was extremely Bullish setting the Low of the Day within the first 15 minutes, before proceeding to climb for the remainder of the session. The candle formed on the Daily chart by today's price action implies strong momentum to the upside with a long rejection wick on the bottom. The last few trading sessions have created candles with similar wicks, confirming that price is definitely reacting to the support levels identified. Now with earnings in the rearview mirror, both directions are still on the table. Bias is to the upside however, given the state of the macro economy a breakdown is still highly plausible as well. Especially with the FOMC Rate Decision tomorrow. No matter the outcome it typically makes for an extremely volatile day. If presented an opportunity to enter at ideal levels the plan is to take an initial position to the long side. Ideal entry would be at the red Ascending Support Trendline, the Key Zone represented by the black rectangle, or just inside the Fib retracement Golden Zone. Any trade taken would be with be done with a watchful eye as this area has served as support over the last few sessions therefore, a return to this area could also result in a bigger drop with possibly fewer buy orders/stop losses to serve as support. Should the stock fail at the levels naturally bias would then shift to the downside. If price action seems stagnate or too erratic the best decision may be to exercise patience and wait for the dust to settle a little more. There is also a looming Jobs Report scheduled for the end of the week that could also move the markets.