Semiconductor maker Advanced Micro Devices (AMD) has been rallying in recent weeks and seems to be leading the industry higher. Let's review the charts and indicators and see where that leads us.
In the daily bar chart of AMD, below, I can see that the shares made a low in October and have rallied above the rising 50-day moving average line as well as above the bottoming 200-day moving average line. Trading volume was on the light side in December, January and February but it has improved in March.
The daily On-Balance-Volume (OBV) line shows a rise from early November telling me that traders have been more aggressive buyers the past five to six months. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of AMD, below, I see an improved picture. The shares are now trading above the bottoming 40-week moving average line.
The trading volume has not increased in recent months but the weekly OBV line does show some improvement. The MACD oscillator has been rising from October and is close to crossing above the zero line for an outright buy signal.
In this daily Point and Figure chart of AMD, below, I can see a potential upside price target in the $107 area.
In this second Point and Figure chart of AMD, below, I used weekly price data. Here the software projects a price target in the $142 area.
Bottom-line strategy: AMD has rallied and its stock price is relatively overbought so a correction would not be a big surprise at this point in time. Keeping this in mind, I would look to be a buyers of AMD after a sideways to lower correction. Ideally the level to buy should be near $90.
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