Familiar Pattern in the AMD Chart

The Fed’s tightening puts hard pressure on the broad stock market and chip makers are not the exception. The strong labor market statistics and ongoing inflation pressure supports the hawkish mode.

If one thinks that the sell-off might be over, there is a chart below that I spotted a disastrous model for a well-known chip maker Advanced Micro Devices, Inc. (NASDAQ:AMD).

You definitely know this chart pattern I spotted for you. It is a Head & Shoulders reversal model. Last time this notorious chart pattern appeared in my posts was in May on the chart of Ethereum cryptocurrency. I updated it for you below to illustrate the historical sample.

ETH Weekly Updated

Source: TradingView

As soon as the price crossed below the Neckline beneath $2,400, Ethereum collapsed as it had lost a tremendous 66% down in the valley of $884 in June from the post level of $2,564.

This is how this model has played out before and that is what we could expect in the next chart of AMD below.

AMD Weekly

Source: TradingView

The Head & Shoulders pattern (pink) here is more balanced compared to up-sloped model in the Ethereum chart. The Neckline touch points are located almost exactly at the same level of $72, hence it is a flat line. The Head is quite tall above the wide Left Shoulder and the narrow Right Shoulder. The top of a latter offers a strong resistance and the invalidation point. Continue reading "Familiar Pattern in the AMD Chart"

Chip Maker Hits Target, Beats Rivals and Bitcoin

Last November I shared a promising trading opportunity to play on the Modern “Gold Rush” For Cryptocoins. Like the Great Gold Rush, I thought that those who sell equipment could benefit from new a “tulip mania” as this crypto buzz was called in the media.

I selected three chip makers, which were well known for the broad use of their products in the “mining” of cryptocoins. These companies are NVIDIA Corporation (NVDA), Advanced Micro Devices, Inc (AMD) and Taiwan Semiconductor Manufacturing Company, Limited (TSM). Firstly, I made the same comparative chart analysis of their stocks as I usually do for the classic mining stocks; it is funny that the word “mining” I used here has a totally different meaning.

We were on the right path as despite the market euphoria there was one stock, which lagged behind the others and the gap was significant. The laggard Advanced Micro Devices (AMD). It was the only one, which showed the negative price dynamics for the first ten months of 2017 with a -2.71% loss compared to +104.58% for NVDA, +43.94% for TSM and +14.62% for S&P 500. Continue reading "Chip Maker Hits Target, Beats Rivals and Bitcoin"

The Modern Gold Rush: These Three Stocks Could Benefit

Aibek Burabayev - INO.com Contributor - Metals

History repeats again and again as human beings don’t change; they only change on the surface. There is a good lesson learned from the Gold Rush in the 19th century – there were some lucky diggers, who made a fortune, at the same time many merchants who were selling equipment and jeans became rich. But many adventurers left broke.

These days we have the Crypto-Mining Gold Rush led by Bitcoin with a market share of more than 60% and market capitalization over $124 billion. This coin is worth as much as the Hungarian GDP and exceeded the market cap of NVIDIA Corporation (NASDAQ:NVDA) – one of those “merchants” selling “shovels” to modern “diggers” aka miners.

Today, as long ago, the competition gives an advantage to cooperated mining pools with the most advanced equipment, lowest electricity, and labor costs. That’s why there is no surprise that the top mining pools are located in China (70% of the Bitcoin hashrate).

There are two main types of suppliers to the crypto mining industry: electricity suppliers (up to 70% of all mining costs) and equipment suppliers. The massive demand for mining equipment attracts nimble middlemen, for instance, they resell the ASICs (application-specific integrated circuits, microchips) for 2x-3x of the original price tag, making relatively risk-free money on modern “diggers” that risk a lot. Continue reading "The Modern Gold Rush: These Three Stocks Could Benefit"