Quick AMD Update

AMD is up +12% and still very much within a base, so I still like AMD a lot as a longer term long position. I plan on leaving it open because I plan on treating it more like a trending trade. Of course if I saw something that provided a high probability trade like a strong pullback in which I thought AMD could be sold at higher levels and bought back at lower levels, then I'd consider that.

Remember for bases or tops you need a wider stop and a greater tolerance for risk, there's a risk management link at the top right of the member's site, or right HERE. It all basically comes down to your risk tolerance (I prefer the 2% rule, which is maximum loss per position on the overall portfolio-this is not a position size loss; through position sizing you can have a 20% position loss and still a 2% or less portfolio loss) and what your rule are, then position sizing and/or tactical management like phased in entries, but these all have to be part of your trade/risk management plan before you ever enter the position.

As for AMD, it has a decent gain for what it is right now, it could obviously see some downside in the near future, but I don't see anything that I'm really concerned about. Here's a look at the charts that matter for the trade plan in AMD and the stop.

 Remember the 3C rule, "When in doubt, go to the longer/longest timeframe; it is here where the trend and the larger picture of underlying money flows show up without a lot of noise (you give up some detail, but you gain a clear understanding).

This is the daily chart, an extremely long and powerful timeframe, very few trades are based on the daily chart (at least right now) because of the way the market has been trading, but you can see CLEAR Distribution as the 2011 top and Clear accumulation at the current 2012 base-like area- both divergences are also the stronger leading divergence.

 The 60 min chart which is still an extremely strong timeframe shows the leading positive at the October-November lows and price moved up from there. There's a gap right in the area from $3-$3.20 which will probably ultimately lead to a pullback before AMD can enter stage 2 mark up, we may even end up with something more like a "W" base, but I think we'll get clearer signals if that is going to happen.

There's a slight relative negative divergence here, I'm not too concerned about it.

The Trend Channel is set to 3 days for a trending trade, it held the entire move down for a gain of 65-75% depending where you entered and exited obviously, but there's no arbitrary guessing about where to exit the short trade, the Channel would have kept you in when emotions may have been pressuring you to get out with a much smaller profit.

As for the upside trend, the current stop (that continues to move up and is totally based on AMD's own unique character) is $2.25, nearly every day it will move up. Personally I would not use $2.25, it's a bit too obvious, I'd pick something like $2.22 or $2.27 depending on which side of the stop I wanted to be on.

So for now, I consider AMD a hold, hopefully an add to soon.