AMD Follow Up

AMD is definitely not a dead trade, there's still a lot of reason to be optimistic about it, but remember that AMD, like many of the other longs, is a longer term position that is almost certainly basing and that's a volatile process, it can also be a long process. I just feel better about taking some hard fought for profits off the table and reducing risk here, in the larger scheme of things, I doubt it will matter much if we miss a few percent to err on the side of caution.

 AMD has about a +27% gain, which is nothing considering it hasn't even reached mark up. The position was opened around $2.13, at the capture the last price was $2.70.

 If I had to guess how big the AMD base area is, this would be the minimum. There were several Crazy Ivan shakeouts, we see more of these in bases and tops, the first was coming out of a tight range, stops and orders on both sides of the range were hit, then it happened again off a bullish symmetrical triangle.

AMD could come all the way down to $2.00 and still be building a base, that's not a prediction, just perspective.

 I don't like these last 2 days down, even though they formed a "Tweezer Bottom" upside reversal yesterday, today has filled in the gap, I'd love to see a break above this congestion area as I like AMD long term, but I wouldn't be willing to put a full size position with gains like that at that kind of risk in this kind of situation.

 Long term on the 4 hour chart, the trends are very clear, negative top, in line downtrend and a recent leading positive divergence in the base area. However this chart is so long, the last several days are likely not even registering yet unless they were exceptionally large distribution.

 On the 60 min we see the leading positive at the base lows and a recent negative divergence, any negative on a 60 min chart should be taken seriously.

I could post a lot of charts in the intraday timeframes, the bottom line is there was short term accumulation at the Tweezer bottom and most of those intraday charts are slightly positive or in line, but I don't want to wait around for them to go the other way as the gap is just about all filled.

The bottom line is I don't think the positive divergence at the Tweezer Bottom reversal can possibly be big enough to compete with the 60 min negative which does not look like the death of the AMD base, but it does look like it could lead to a substantial pullback, especially if market conditions deteriorate with it.

On the other side of the coin, being able to buy AMD at lower levels (so long as the 3C charts support the move) is something I'd be excited about.