4 Trade Ideas for AMD: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

AMD, $AMD, spent 4 months in consolidation after a small bounce from the March low. It the exploded higher to a top in August. It has been consolidating under resistance, with one failed break out, ever since. The price ended Friday at resistance with the Bollinger Bands® turned higher.

The RSI is rising into the bullish zone with the MACD positive and moving higher. There is resistance at 88.25 and then 94. Support lower comes at 86 and 83 before 79. Short interest is moderate at 3.9%. The stock does not pay a dividend. The company is expected to report earnings next on January 26.

The December options chain shows large open interest from 82.50 to 85 then again at 80 and 75 on the put side. On the call side it builds to a peak at 90 and remains large through 100. The January chain sees open interest build from 90 to a top level at 75 on the put side. On the call side it builds from 75 to a peak at 100. The February chain is the first to cover the next earnings report. It is still building but has largest open interest at the 75 put and then the 87.50 and 100 calls.

AMD, Ticker: $AMD

Trade Idea 1: Buy the stock on a move over 88.50 with a stop at 86.

Trade Idea 2: Buy the stock on a move over 88.50 and add a December 88/86 Put Spread ($1.20) while selling the December 96 Call ($1.13).

Trade Idea 3: Buy the December/February 92.50 Call Calendar ($4.65) and sell the December 83.50 Put ($2.15) to lower the cost.

Trade Idea 4: Buy the February 75/90/100 Call Spread Risk Reversal (35 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the first week of December, sees equity markets have moved out of consolidation and are showing strength.

Elsewhere look for Gold to continue its pullback while Crude Oil drives higher. The US Dollar Index continues to move to the downside while US Treasuries resume the move lower. The Shanghai Composite looks to continue press against resistance while Emerging Markets trend to the upside.

The Volatility Index looks to continue towards a new lower range making the path easier for equity markets to the upside. Their charts are looking strong again, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are starting to break ranges higher with the IWM leading them to the upside. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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