A Look At Advanced Micro Devices Heading Into Q2 Earnings Print


Advanced Micro Devices, Inc AMD is set to print its fiscal second-quarter financial results after the market closes on Tuesday. The stock was trading over 3% higher heading into the event.

When the chipmaker printed its first-quarter results on May 3, the stock gapped up 7.74% the following day, but over the next three days, AMD gave back all the gains and more.

For the first quarter, AMD reported an EPS of $1.13 on revenue of $5.89 billion. The company beat the EPS estimate of 92 cents on revenues of $5.52 billion.

For the second quarter, analysts estimate AMD will print earnings per share of $1.03 on revenues of $6.53 billion.

Ahead of the event, Morgan Stanley analyst Joseph Moore maintained an Overweight rating on AMD and lowered the price target from $103 to $101.

From a technical analysis perspective, AMD’s stock looks set to trade higher over the long term, but is in need of consolidation. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The AMD Chart: AMD opened slightly lower on Tuesday, but continued rising higher for the fifth straight trading day in a row. The sharp multi-day surge was due to the stock breaking up bullishly from a bull flag pattern that was formed between July 13 and July 26.

  • The measured move on a break from the bull flag was 23% and so far, AMD has shot up about 17%, indicating the stock could rise higher still before topping out. A pullback, at least to print a higher low, is needed, however, and could come soon because AMD’s relative strength index (RSI) is measuring in at about 69%. When a stock’s RSI reaches or exceeds the 70% level, it becomes overbought, which can be a sell signal for technical traders.
  • The rise higher on Tuesday was taking place on higher-than-average volume, which indicates there are many traders anticipating a bullish reaction to AMD’s earnings print. At press time, over 84 million AMD shares had exchanged hands, compared to the 10-day average of 82.03 million.
  • AMD has resistance above at $99.82 and $106.99 and support below at $92.75 and $87.45.

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Image and article originally from www.benzinga.com. Read the original article here.