Advanced Micro Devices, Inc. (AMD) shares rose more than 3% during Monday's session after Morgan Stanley raised its price target to $32 per share. Analyst Joseph Moore believes that AMD is in a "remarkable position" to increase market share in every segment next year by competing with Intel Corporation (INTC) and NVIDIA Corporation (NVDA) at a fraction of their research and development (R&D) cost.

The Morgan Stanley analyst maintained his Equal Weight rating on AMD stock, since his 2020 earnings per share (EPS) estimate already prices in much of these gains, but he raised his price target by $2 per share. In addition, Bank of America Merrill Lynch reiterated its Buy rating on AMD stock ahead of the Oct. 29 earnings release. Analyst Vivek Arya cautioned that expectations are "steeper" for AMD compared to rival Intel, but fourth quarter sales guidance of at least $2 billion would be viewed as "good enough" as long as the company shows gross margin leverage. 

Chart showing the share price performance of Advanced Micro Devices, Inc. (AMD)

From a technical standpoint, the stock briefly broke out from trendline resistance during Monday's session before giving up ground later in the day. The relative strength index (RSI) climbed to 65.89, approaching overbought levels, but the moving average convergence divergence (MACD) continued its bullish upswing. These indicators suggest that the stock could have a bit more room to run before experiencing some consolidation.

Traders should watch for consolidation above trendline support if there's a breakout or above the 50-day moving average at $30.29 if it doesn't occur. If the stock does break out, traders could see an intermediate-term move to retest trendline resistance at around $34.50, which has proven to be a tough area to break through in the past. If the stock breaks down, it could test trendline and 200-day moving average support at $27.89, although that scenario appears less likely to occur.

The author holds no position in the stock(s) mentioned except through passively managed index funds.