Advanced Micro Devices Stock News and Forecast: Downward trending AMD stock rises in premarket

Advanced Micro Devices fell another 3.4% on Monday.
Investment banks and research outfits have an AMD stock consensus price target of $141.50.
Competitor Intel said it will spin out autonomous driving unit.

Clay Webster FXStreet

Thus far, December has not been kind to Advanced Micro Devices (AMD). The semiconductor designer was up 32% in November and more than 60% since early October but has given up 12.2% since the beginning of the month. AMD saw major plunges on Wednesday and Friday of last week. Though it fell 3.4% on Monday in contrast to the S&P 500's 1.2% gain, on Tuesday it is up 2.3% at $142.24 in the premarket.

Advanced Micro Devices (AMD) Stock News: GlaxoSmithKline

England's GlaxoSmithKline (GSK) said its therapeutic treatment Sotrovimab is effective against all variants of Covid-19, including Omicron. This news appears likely to lead to a market resurgence on Tuesday after the pummeling it received last week.

Just before the latest downturn, Bank of America (BAC) said that for the first time in its history AMD stock had a greater percentage of ownership by investment funds than rival Intel. Management at Intel may have read the note as on Monday they announced their intention to spin out their autonomous driving subsidiary Mobileye. Intel wants to remain the majority owner of the company but will issue new shares in order to bring in necessary capital for the newly public firm.

AMD CEO Lisa Su announced at a conference last week that she expects the acquisition of Xilinx to be completed before 2022. The chip maker has received anti-trust approval in the US and Europe but is waiting on feedback and approval from third-party partners in China.

AMD key statistics

Market Cap	$174 billion
Price/Earnings	44
Price/Sales	12
Price/Book	24
Enterprise Value	$171 billion
Operating Margin	21%
Profit Margin	27%
52-week high	$164.46
52-week low	$72.50
Short Interest	6%
Average Wall Street Rating and Price Target	Buy, $141.50

Advanced Micro Devices (AMD) Stock Forecast: Expect $120

After the Moving Average Convergence Divergence (MACD) crossed lower on December 1, it has been all downhill for AMD price. The indicator continues to show divergence between the MACD and signal and appears headed toward zero next.

This seems an awful lot like a cyclical pullback. AMD rose more than 60% in the past two months, and now many investors are fleeing the most expensively valued stocks ahead of expected Fed rate hikes and bond purchase tapering.

Monday's daily candle is a bit of a doji, but one would expect AMD stock to give up more grand as the MACD continues its drift lower. Currently, support exists just below $130 and $120. The S1 Fibonacci pivot sits at $129.52, and the S2 is affixed to $118.60. The 9-day moving average is still above the 21-day, but we would expect AMD price to cross over this week. As the 9-day crosses the 21-day, more technical traders and algorithms will join in the party, and we expect AMD to bounce off the $120 area.

FXStreet View: There is no reason to be bullish until AMD price closes above $160 again.

AMD 1-day 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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