Update on my AMD (AMD) trade

Today’s sell of on the AMD trade was brutal and I am currently underwater on this one.  But I am still going to affirm my position unless it breaks the support line around $3.80.  Personally, I think this stock is trying to get back to its upward sloping trendline.  But I hope it’ll get to the trendline first before it breaks the support line as it will be very discouraging for me.

New lesson that I probably learned from this trade is to be very careful of the Stochastic RSI and the MACD.  I bought this stock at overbought levels but I thought the news about Intel’s lost in the anti-competitive case was strong enough to fight the overall bears of the market. 

But I guess yesterday’s retail data really hit the market hard and hopes for a near term economic recovery may not be near at all. 

Bought AMD ($AMD) today

Bought AMD shares today at the close  at $4.35. 

• Optimism gained back again for AMD after the European Union imposed fines that could reach as high as $4 billion on anti-competition measures.
• More than the dollar amount, the order could force Intel to change the way its marketing affairs are conducted. 
• On top of that Intel has recently reported a lost of 4.7% market share to land at 77.3% in Q1 2009.  While AMD picked up 4.6% to land at 22.3% a share. 
• Thus to my surprise as well, AMD remains a strong competitor even while Intel is launching one strong product after another.

Technicals

Volume confirmed the break out on May 4th, 2009 beyond the $3.87 critical resistance level.  Slight pullback occurred on the intraday today managed to gain above previous day’s highs showing a favorable bullish signal.  For now, target price $5.30. 

Source: FOX Business & Fool.com