Advanced Micro Holds the Gap

Advanced Micro Devices was the top performing member of the S&P 500 in both 2018 and 2019. It’s holding its own again this year by simply being flat while the broader index is down more than 20 percent.

The semiconductor company also never closed below its 200-day simple moving average. (According to TradeStation data, barely 6 percent of the S&P 500 is currently above that line.) Relative strength like that can be a positive signal.

Another pattern is the bullish gap from March 24, which AMD is holding today. Most other stocks in the market flew higher that session, but AMD got trapped below its 50-day SMA. Traders looking to own this closely followed stock may want to use the current $44 gap area as an entry. Or, they may wait for a potential breakout of the 50-day SMA.

Either way, big technology has been a bright spot in a market full of gloom. Companies like Microsoft and Micron Technology have indicated the trend toward working remote will prove a long-term positive for the sector. AMD’s in a similar position because of its exposure to cloud computing and gaming.