Advanced Micro: If at First You Don’t Succeed…

Advanced Micro Devices was the S&P 500’s top performer in both 2018 and 2019. It’s having another positive year, but remains trapped at a key resistance line that started in late February.

AMD tried to break out last week after finding support at its 50-day simple moving average (SMA). It peaked out after the Fed meeting, along with the rest of the market and quickly fell back into its range.

The next day brought the S&P 500’s worst drop since mid-March, but buyers still defended AMD's 50-day SMA. And, it’s holding that line again today.

Bollinger Band width shows how tightly AMD has traded as prices squeeze between the 50-day SMA and the trend line. This may create the potential for a strong run if the stock closes much above $56.

It’s also noteworthy that the current price zone is above its long-term high of $48.50 from June 2000. That may add fuel to the fire if it breaks out and starts running.

AMD is one of the most active options underliers, averaging more than 350,000 contracts per session. Momentum traders know this name well. The bulls tried and failed last week. But will they give it another try soon?