Advanced Micro Devices, Inc. (AMD) shares rose more than 6% during Tuesday's session after a new research paper from the Worcester Polytechnic Institute suggested that Intel Corporation (INTC) could face another major security issue. The so-called SPOILER vulnerability enables Intel CPUs to be exploited through malicious JavaScript in the browser or system malware, enabling attackers to access passwords, keys and other data from memory.

Morgan Stanley separately suggested that AMD has a "significant opportunity" from cloud gaming chips following its success in winning part of Alphabet Inc.'s (GOOG) gaming initiative. The analyst firm estimates that AMD earned $50 million in cloud gaming revenue in Q4. Despite the bullish commentary, the Morgan Stanley analyst maintained his Underweight rating and price target of $17.00 on shares of the chipmaker, suggesting an already lofty valuation.

Many chipmakers have also been affected by the ongoing U.S.-China trade war. With the Trump administration pushing U.S. allies to abandon Huawei, many companies are worried about retribution from a market that accounts for a significant portion of revenue for U.S. chipmakers.

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

From a technical standpoint, AMD stock broke out from the pivot point at $23.77 toward trendline and R1 resistance at $25.28. The relative strength index (RSI) moved toward overbought territory with a reading of 61.88, but the moving average convergence divergence (MACD) could see a near-term bullish crossover. These indicators suggest that the stock could have more room to run following today's rally.

Traders should watch for a breakout from trendline and R1 resistance at $25.28 to R2 resistance at $27.02. The longer-term price target for the ascending triangle breakout would be reaction highs of $29.00 per share made back in October. If the stock fails to break out from resistance, traders could see a move lower to retest the pivot point at $23.77 or trendline and 200-day moving average support at around $21.44.

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