Chart Request: Advanced Micro Devices (AMD)

Fellow blogger Hakan writes:

You reviewed AMD for Phil on December 2, 2005. I was wondering if you could take a look at the chart and comment on it if you have time? Do you think it is time for a pullback?

Yes, I do think it’s time for a pullback in AMD. The stock has been walking up its upper Bollinger Band for almost a month now. Yesterday’s high-volume reversal candle is a good warning, IMHO. I hate to sound like a broken record but I feel pretty much the same about AMD now as I did back in early December — I’d hang on if I was already long and if I wanted in I’d wait for a lower risk spot. By lower risk I mean close to some type of support — a trendline, moving average or straight line support. I’d also like the stochastic to not be in overbought territory, especially after the run the stock has had.

I saw on CNBC that AMD got downgraded Deutsche Bank last night so maybe that will provide a buyable dip. But on the other hand, I see that it got upgraded this morning by JMP Securities:

JMP Securities raises their AMD tgt to $40 from $30, and raises their Q4 EPS est to $0.28 from $0.21 (consensus $0.25), as they believe that AMD will likely beat its guidance of 7-13% sequential processor revenue growth. In particular, their checks indicate that AMD continued to gain share in consumer/retail media-center desktop PCs and notebook PCs with its Athlon64 and Turion64 products while the co’s Opteron server chips continued to gain share against INTC with a broad range of OEMs including HPQ, SUNW, IBM, and Fujitsu- Siemens. Given strong 4Q cell phone demand, they say AMD likely observed improving unit demand and pricing for its Spansion flash memory business, which was spun off as an IPO toward the end of the quarter.

We have a horse race! There was also ‘news’ about Dell using AMD’s chips yesterday. Place your bets!