Advanced Micro Devices Stock Forecast: AMD faces resistance at $109

Advanced Micro Devices priced $1 billion in a debt offering this week.
AMD stock is stuck between $102 and $109.
EV maker Nio denies a partnership that AMD announced on Monday.

Clay Webster FXStreet

Advanced Micro Devices (AMD) stock is parrying some of its gains from last week but has clung onto its perch above the downtrend top line that had resisted its rallies for the past six months. AMD closed above the downtrend's top line last week and used it as support this week, but resistance at $109 seems stark at the moment. Shares have remained flat to down on Tuesday and in Wednesday's premarket.

Also read: Apple Stock Deep Dive: AAPL price target at $100 on falling 2023 revenues

AMD Stock News: Pricing $1 billion in debt and angering Nio

AMD has priced $1 billion worth of 10-year and 30-year senior unsecured notes. Half of the notes were priced at 3.924% and are due June 1, 2032, and the other half were priced at 4.393% and are due June 1, 2052. The debt sale is expected to be finalized on June 9 and will be used for "general corporate purposes." Vague!

Broker TD Ameritrade published its May Investor Movement Index reading on Monday. The index fell from April's reading of 6.33 to 5.86 in May, which means that retail traders reduced their stock purchases MoM. One bright spot in this treacherous market is that AMD was named as one of the primary stocks being bought on the broker's platform.

"In May though, uncertainty and cautious outlooks from reporting companies and analysts drove investors to the sidelines,” according to Shawn Cruz, head trading strategist at TD Ameritrade. "For the first time since December ‘21, TD Ameritrade clients were net sellers of equities in May.”

A strange drama unfolded this week with Chinese EV maker Nio. The semiconductor company posted a video acknowledging a new partnership with the carmaker. It said Nio was using its EPYC family of chips in its platform for developing artificial intellegence software. This must not have been run by Nio's people, as the carmarker appeared perturbed by this unwanted public relations announcement.

"This move by AMD is very unfortunate. After talking to it, AMD only removed the message from the official website, and the marketing campaign on Weibo still exists. AMD please remove this Weibo post," Ma Lin, senior director of corporate communications at NIO, told CnEVPost. It appears that Nio is not denying using the EPYC chips in their development platform. Rather they are denying any explicit partnership.

AMD Stock Forecast: $109 appears to want a fight

As you can see on the weekly chart below, the AMD share price broke through the descending resistance line last week that has been all-powerful since December 2021. This week it used the top line as support, which is typically a sign of a consolidation period before a further rally.

AMD stock is also trading above the 21-week moving average for the most part.

AMD weekly chart

The daily chart below shows that there is significant resistance that remains at $109 however. Thursday, Friday and then Monday all encountered resistance around $109.30. The good news is that the 9-day moving average continues to lead the 21-day moving average. The Moving Average Convergence Divergence (MACD) indicator is also perking up and showing more strength for a rally.

AMD daily chart

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Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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