Advanced Micro Devices stock has pulled back to its 320-day moving average
Shares of Advanced Micro Devices Inc (NASDAQ:AMD) are extending yesterday's 10.6% post-earnings drop, down 3.1% at $144 at last glance and breaking into negative territory for the year. A short-term rally could be on the way, however, if past is precedent.
The semiconductor name pulled back to its 320-day moving average during this week's negative price action, and per Schaeffer's Senior Quantitative Analyst Rocky White, it's run into this trendline three times in the last three years. For the purpose of this study, White defines that as the equity trading above the moving average 80% of the time over the past two months and closing north of the trendline in eight of the last 10 sessions before coming within striking distance of it.
AMD finished higher one month later after 100% these signals, averaging a large gain of 21.1%. From its current perch, a similar move would put Advanced Micro Devices stock just above $175, which is home to its early-October peak.
It's also worth noting that the stock's 14-day relative strength index (RSI) of 26.2 sits in "oversold" territory, which typically precedes a quick rally. An unwinding of pessimism amongst options traders could also provide tailwinds, as AMD's Schaeffer's put/call open interest ratio (SOIR) of 1.07 stands in the highest possible percentile of readings from the past 12 months.