Advanced Micro Devices reported their second quarter earnings yesterday, but they couldn’t live up to the expectations. Revenue was down 13% year over year, net income fell over 40% and AMD said that it expects its full-year results won’t be as good as the previous forecast. On the news the stock fell double digits.
I remember writing a post about AMD almost one year ago and I remember that $33 level being a monthly supply zone which eventually push price to the sub $20 level. It’s still so vivid because I remember I was wrong on the call and thought price was going higher.
NOTE: I should of known better, as very few things trump a monthly zone, but at the time, all I saw was AMD's price continuing to higher after years of hibernation.
The CEO, Lisa Su said the weaker than expected forecast was due to weakness in gaming consoles as both Microsoft Corporation and Sony Corp announced they were coming out with new game consoles. Needless to say the stock fell double digits yesterday. However, I’m not surprised because the way that monthly supply got me almost a year ago, got many traders/investors who went long yesterday or didn’t take some profits off the table.
On the daily chart, price formed a "M" pattern which is a reversal pattern. So the potential price action over the coming days/weeks might be to the downside.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.