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AMD Trade Update & Additional Analysis

As a follow-up to the trade setup & entry on AMD (Advanced Micro Devices) posted earlier today, I just wanted to state that the trendline break & recent divergent high on the 60-minute time frame were not the only considerations that went into adding the stock as an official trade idea today (and unofficial trade in the trading room yesterday).

I will often use the bullish & bearish crossovers on the PPO or MACD as confirming signals for an entry on a long or short trade setup. Essentially, I prefer to see what I refer to as "clean" crossovers, meaning that the signal line on the PPO has crossed over after a period of fairly clean separation between the two. I try to avoid extrapolating any useful information from the PPO crossover when a stock has been trading in an erratic, choppy range as that leads to increased whipsaw (false) buy & sell signals.

Other than simply looking at the recent action on the PPO line & the signal line (PPO 9-ema), one can glance at the PPO histogram, which provides a quick & easy visual representation of the differential between those two lines, i.e.- the higher (or lower) the histogram bars, the greater the distance between the PPO line & the signal line. As such, I like to see big green & red "hills" & then wait for the zero line crossover (which is also indicated by the histogram bars going from green to red & vice versa). That smaller red & green hills between the vertical lines that I added to the point of the "clean" crossovers are examples of when I don't put much of a weighting on the crossovers.

AMD daily 2 Sept 19th

AMD daily 2 Sept 19th

As the vertical lines on the chart show, those previous "clean" bearish crossovers on the PPO, such as the one occurring today, were followed by corrections ranging from 16% - 39%  & this time around, I expect a drop of at least 29% off the recent high, with today's bearish crossover on the PPO as a confirming sell signal to the recent 60-minute trendline break & divergent high.

With that being said, even the most objective entries with tons of confirming evidence to support a trade by no means guarantees success, especially when trying to catch a top on a stock in an extremely powerful uptrend line AMD. As such, a well-placed stop will minimize losses if this, or any trade, doesn't pan out & allow to stay in the game & catch the next one.

On a final note, I had mentioned a break below 30.15 (a couple of cents below the 30.17 minor support level) as providing another, slightly higher-probability, objective short entry or add-on to a partial position shorted here. I should also add that AMD may very well want to make one more thrust up to backtest the 60-minute trendline from below before finally rolling over (assuming that it does soon). As such, a backtest of the trendline, or even better, an impulsive rejection following a backtest of the TL, would also offer an objective short entry or add-on on Advanced Micro.

2018-09-19T13:37:44+00:00Sep 19, 2018 1:37pm|Categories: Completed Trades - Short|Tags: |6 Comments

6 Comments

  1. jumpingbean September 19, 2018 1:44 pm at 1:44 pm

    Great call! Btw, am I the only one who can’t click on the “[…]” and expand to see the rest of what you’re saying? I can’t click on the chart to enlarge either. Both functions used to work and now don’t.

    • FrancisQ September 19, 2018 2:36 pm at 2:36 pm

      Click on “[…]” won’t work for anyone. Click on the topic line, instead. “AMD Trade Up”

    • rsotc September 19, 2018 3:34 pm at 3:34 pm

      What happens is when I made a post on the front page, that will appear as:

      “rsotc wrote a new post, AMD Trade Update & Additional Analysis 2 hours ago”

      Unlike a post made directly in the trading room, it won’t expand by clicking on those three dots. You must either click on the title of the post or the “2 hours ago”, as both will hyperlink to the post on the front page.

      Posts that I make in the trading room look like this:

      “rsotc posted an update in the group Group Swing Trading an hour ago” followed by the post content & will expand when clicked on if truncated.

  2. MattChartier September 20, 2018 6:27 pm at 6:27 pm

    Took this short this morning on the retest of the TL with an ajusted position size.
    This trade looks promising
    Thanks !

  3. zepp64 September 25, 2018 10:55 am at 10:55 am

    Hi Randy, please provide feedback on AMD. Is this trade stopped? Still active? Thanks,

    • rsotc September 27, 2018 9:28 pm at 9:28 pm

      My apologies for the late reply zepp64. I was just deleting old notifications & saw this one. Technically, yes, the AMD trade was stopped out but I am considering adding it back as another short trade & I’ve posted several updates on it in the trading room & in recent videos after the stop was clipped stating that I still think the trade has a good chance of panning out for those that gave it a little more room on their stops.

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