Advanced Micro Devices Inc. (AMD) shares whipsawed lower on Wednesday and erased nearly all the prior day’s gains. The drop came in reaction to the company’s apparently-muted analyst day where it outlined the Epyc server CPU roadmap and other initiatives. Loop Capital cut the stock to a ‘hold’ – on par with many other analysts – while Phillip Securities initiated the stock at a ‘buy’ with a $14.50 price target and Rosenblatt reiterated its ‘buy’ with a $20 price target.

Earlier this week, the stock gained more than 7% after reports that Intel Corp. (INTC) is licensing its graphic chips following the expiration of its deal with Nvidia Corp. (NVDA). The report suggests that AMD’s Raja Koduri’s close work with Intel in the past could favorably influence the negotiations following the Nvidia deal’s March 17 expiration. If it’s true, the move could open the door to a significant potential revenue stream for AMD’s Radeon division.

From a technical standpoint, the stock broke out from its S1 level at $12.10 earlier this week and nearly touched its 50-day moving average at $12.92 before today’s move lower. The stock now trades below S1 support and could move to the lower end of its price channel near its 200-day moving average at $10.01. A breakout from its upper resistance could lead to a move to R1 resistance at $14.62 or R2 resistance at $15.94.

Technical indicators remain somewhat mixed at current levels. The relative strength index (RSI) trades at a neutral 46.97, while the moving average convergence-divergence (MACD) experienced a bullish crossover following its bullish move earlier this week.

Traders should watch for a retracement to S2 support at $10.90 or its lower trend line at around $10.00 or a move back above S1 support at $12.10 to re-test its 50-day moving average at $12.92. But overall, the short-term trend is bearish and the long-term trend remains bullish.

Charts courtesy of Author holds no position in the stock(s) mentioned except through passively-managed index funds.

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