AMD's Breakout to Success: Investing Opportunity

Table of Contents

1. Introduction
2. Setting up the AMD trade
   1. Early entry through an alternate pivot
   2. Current price action
3. Ross Haber's analysis of last week's top ten report
   1. Consolidation pivot or early entry
   2. Anticipating the trade
4. Examining the fundamentals and market outlook
   1. Short-term extension and risk management
   2. Strong earnings, sales, and margins
   3. Increasing trend in number of funds
   4. High-quality fund sponsorship
5. Analyzing the AMD Chart
   1. Big push and institutional buying
   2. Sideways action and volume Patterns
   3. Identifying potential entry points
6. Putting things in perspective
   1. Holding near the 100 level
   2. Long base and base on base pattern
   3. Weekly chart analysis
7. Strategy for the trade
   1. Selling and buying on strength
   2. Managing risk and change of character
8. Assessing the sector and industry group
   1. Leading stock in a strong group
   2. Importance of sector and industry performance
9. Conclusion
10. Like, subscribe, and future videos

📈 Setting up the AMD Trade

In this article, we will discuss the trade setup for Advanced Micro Devices (AMD). We will cover the early entry strategy that was triggered through an alternate pivot and analyze the current price action. This analysis is based on the top ten report by Ross Haber, which provides valuable insights into potential trading opportunities.

🔄 Early Entry through an Alternate Pivot

Last week, AMD caught our attention due to a consolidation pivot or early entry opportunity. We noticed that the moving averages were starting to rise, aligning beneath the expected price level, creating a potential launching pad for the stock. While we were a bit early in our entry, the trade worked out well, with an increase in volume compared to the previous week. This early entry strategy allows us to manage risk tightly against the moving averages.

💲 Current Price Action

Looking at the current price action, AMD is slightly short-term extended after a notable move. However, the fundamentals of the company remain strong, with impressive earnings, sales, and margins over the past four quarters. The annual EPS estimates for this year and the next indicate significant growth potential. Additionally, the stock has gained support from high-quality fund sponsorship, with notable institutions showing interest.

📊 Ross Haber's Analysis of Last Week's Top Ten Report

Ross Haber's top ten report provides valuable insights into potential trading opportunities. In the report for last week, AMD stood out due to the consolidation pivot or early entry opportunity. The stock exhibited relative strength on positive divergence, indicating a favorable setup. The report highlighted the importance of volume, with a base breakout or base pivot requiring at least a 20% increase in volume for buying on strength.

📈 Examining the Fundamentals and Market Outlook

When considering a trade, it is crucial to analyze the fundamentals and assess the overall market outlook. AMD boasts strong fundamentals, including impressive earnings, sales, and margins. The company's EPS growth forecasts for this year and the next are also encouraging, indicating positive market sentiment. Furthermore, an increasing trend in the number of funds with positions in AMD adds to the stock's conviction.

📊 Analyzing the AMD Chart

Analyzing the AMD chart provides valuable insights into the stock's price action and potential entry points. The chart exhibits distinctive patterns, including a big push in volume, signaling institutional buying. After the significant volume push, the stock went through a sideways period to consolidate excess. Notably, the volume during this period was below average, indicating a potential setup. As the stock forms the right side of the pattern and demonstrates an early push with increasing volume, it presents an attractive entry opportunity near the 50-day moving average.

🔄 Putting Things in Perspective

To gain perspective, it is essential to analyze the stock's historical performance and long-term patterns. AMD has been in a long base for approximately 10 to 12 months. Currently, it is forming a base on base pattern near all-time highs. This constructive pattern, coupled with volume in all the right places and tight, constructive action, indicates the stock's potential breakout. A weekly chart analysis confirms the stock's attractiveness, further supporting the bullish outlook.

📝 Strategy for the Trade

For this trade, we recommend selling around a third of the position if a solid extension is witnessed off the short-term moving averages. Managing risk and using stop-loss orders are essential aspects of the trade strategy. Additionally, if the stock shows strength, it is advisable to wait for the next consolidation period to add shares. The personality of the stock will determine the ideal buying opportunity, whether it is on a lower or higher consolidation.

🌐 Assessing the Sector and Industry Group

An integral part of the analysis is evaluating the sector and industry group in which the stock operates. AMD is a leading stock in a top-ranked group, which is a positive indicator. Approximately 50% of a stock's performance can be attributed to its sector and industry group. Furthermore, AMD demonstrates a high return on equity, highlighting its efficiency and potential for future growth. The strong sector performance coupled with the company's innovative CEO adds to the conviction for this trade.

🏁 Conclusion

In conclusion, the trade setup for AMD presents a favorable opportunity based on various factors, including early entry through an alternate pivot, strong fundamentals, and a constructive chart pattern. The analysis from Ross Haber's top ten report further supports the decision to take a position in this stock. However, it is crucial to manage risk, follow the stock's personality, and be selective with entries and exits. By considering the broader market outlook, sector performance, and industry ranking, we can make an informed decision for this trade.

▶️ Like, Subscribe, and Future Videos

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Highlights

• The trade setup for AMD provides an attractive opportunity for investors.
• Early entry through an alternate pivot allows for tight risk management.
• AMD exhibits strong fundamentals with impressive earnings, sales, and margins.
• The stock's chart pattern indicates potential for a breakout.
• Assessing the sector and industry group rankings enhances conviction.
• Managing risk, using stop-loss orders, and being selective with entries are crucial.
• Like and subscribe to the Traderlion channel for future videos.

FAQ

Q: How do I execute an early entry strategy in trading? A: Early entry strategies involve identifying consolidation pivots and anticipating potential breakouts. By entering the trade earlier, traders can manage risk more effectively and potentially benefit from a stock's upward momentum.

Q: What factors should I consider when evaluating a stock's fundamentals? A: When assessing a stock's fundamentals, key factors to consider include earnings, sales, margins, EPS growth forecasts, and fund sponsorship. Strong fundamentals indicate a healthy and well-run company with growth potential.

Q: How important is sector and industry group performance when evaluating a stock? A: Sector and industry group performance plays a significant role in a stock's overall performance. Approximately 50% of a stock's performance can be attributed to its sector and industry group. Being part of a strong group can provide tailwinds for a stock.

Q: Why is managing risk and using stop-loss orders crucial in trading? A: Managing risk and using stop-loss orders help protect traders from significant losses. Setting predetermined exit points allows for disciplined trading and prevents emotional decision-making. It is essential to have a risk management strategy in place to safeguard investments.

Q: How can I stay informed about future trading ideas and insights? A: By subscribing to the Traderlion channel and liking their videos, you can stay updated on future trading ideas and insights. The channel provides valuable information for traders and investors seeking informative content related to the stock market.