Last Tuesday, I was looking for Advanced Micro Devices Inc. (AMD) to sustain its earnings bounce and help stabilize the semiconductor sector. While price action looked promising initially, AI-revolution stocks got completely hammered later, highlights Danielle Shay, editor of Five Star Trader.
In theory, the Blue Wave will slow the AI buildout, and semiconductors and memory stocks took the brunt of the significant selling. Last Thursday, AMD finished at $404.40, down 17.2%, while the VanEck Vectors Semiconductor ETF (SMH) fell 11.2%. That is substantial technical damage across a group that has now broken substantial downside support.
(Editor’s Note: Danielle is speaking at the 2027 MoneyShow/TradersEXPO Las Vegas, scheduled for Feb. 22-24. Click HERE to register.)
AMD’s Nov. 3 earnings release reported $13.4 billion in revenue and adjusted earnings of $2.09 per share. Data center revenue reached $8.5 billion, up 97% from a year earlier. The company guided fourth-quarter revenue to approximately $17 billion, plus or minus 3%. Those numbers support why I have been interested in the business.
But after high-volume selling, this is not the time or place to try and catch a falling knife. Buying at support is all about tickers falling within expected ranges, identifying pullback buys at zones that hold, and looking for a shift higher once price gets to those support zones. This move is not that.
The immediate question is whether AMD can reclaim the area around its 200-day SMA, now approximately $415, and hold it. At this juncture, this chart, along with many others, has broken the 200 SMA on the daily chart.
This is a key and pivotal level that usually leads to even more downside. If we see a bounce here, it needs follow-through. Touching a level alone does not repair the trend.
