AMD Bullish Inverse Head & Shoulder Setup
Summary: AMD has been in a multi week (beginning 11/12) inverse head & shoulders pattern that formed within a broader descending channel. There is very little selling pressure on the current test of inverse H&S neckline (142.9) and trendline resistance so I would expect a small, low volume pullback before we get a breakout above the neckline and full reversal. In addition to this, AMD just broke above the 20d SMA and in previous reversal crossovers this year, they were followed by significant uptrends (see Aug’24 and Sep’24 for reference). Bullish Thesis is valid unless the right shoulder fails to form; my preference would be a small right shoulder forming above 139.7 buy zone.
Trade Plan: Day trade or swing calls on a break above 142.9 with expectations of bullish run to 145 & 148. Stop loss would be 20% or failed breakout and loss of 140.9. I will likely be looking for 2-3 week expirations and 145C.
Risk vs Reward: +$5 upside, -$2 downside (2.5:1)
Trade Plan: Day trade or swing calls on a break above 142.9 with expectations of bullish run to 145 & 148. Stop loss would be 20% or failed breakout and loss of 140.9. I will likely be looking for 2-3 week expirations and 145C.
Risk vs Reward: +$5 upside, -$2 downside (2.5:1)
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