AMD Head Fake Move?

That was my initial impression yesterday, that opinion has solidified a bit more today as 3C has caught up to yesterday's fast trade. Head fake moves are common just before a reversal, they are helpful in adding momentum to a reversal in a number of ways and as such, it tends to be the reason we see some sort of head fake move about 80% of the time before a significant reversal, in fact it' usually the last event to occur before the reversal.

 If AMD is going to form a larger base (which I don't have any significant proof of right now), then I'd suspect this portion would only be about one quarter to one third of the overall size, assuming it is similar to the bases AMD forms about once a year. If this i a larger primary trend base, then it could take nearly 2 years as we have seen in the past. In any case, there still looks to be a tradeable move here to the upside in the meantime.

 I mark suspected or confirmed had fake areas with a yellow box or sometimes arrow, these have provided us some of the best entries in stocks we shorted like BIDU and PCLN as well as having given us tactical action areas that match our strategic analysis.

The point of a head fake move below resistance is to shakeout any longs and absorb their shares as well as draw in shorts, when price rises above the newly formed resistance level, short covering helps propel the stock higher.

 Here's the 4 hour 3C chart, as mentioned, we can see the negative divergence that turned the trend from up to down, but there's no evidence yet of a long term base forming.

 The 15 min chart locally shows us the reversal to the downside on a negative divergence around the highs of and just before the 17th, we also see the break below support (red trendline) and a positive divergence on a 15 min chart in to that break, that makes it more likely it is a head fake move.

The 5 min chart also is leading positive at the break below support and the intraday timeframes below 5 min. support this finding. Personally I would hold AMD here for the time.