AMD is having a strong week so far, which started with Monday’s nearly 9% gain. While chasing a stock after such a sharp move isn’t typically advisable for short-term traders, the technical set-up looks compelling from several angles. To start, the rally triggered a clear breakout through this inverse head-and-shoulders pattern — best seen on the weekly chart. We’ve annotated a potential measured move target that would take the stock up to $168, which aligns closely with the 61.8% Fibonacci retracement of the entire 2024–2025 decline at $170. The confluence of these levels increases the likelihood of that target being reached, especially since it also marks a common retracement point in trending stocks. The second weekly chart highlights the key weekly moving averages we track — the 13-week, 26-week, and 40-week lines. AMD’s sharp up-move this week has pushed the stock above all three, which could open the door to additional gains. We saw a very similar setup in early 2023. Back then, AMD had already bounced meaningfully off its October 2022 low, and the breakout above these same moving averages marked the beginning of the powerful rally’s next phase. Supporting that move was the 14-week RSI, which at the time crossed back above the midpoint of the scale — just as it has now. That signal preceded a continued advance, eventually driving RSI into overbought territory as momentum continued to build. From a broader perspective, AMD has already gained approximately 70% off its April lows, which clearly is a powerful rally in a short time. Indeed, the the stock is short-term extended, and we shouldn’t expect the same pace to persist. However, context matters: the advance follows a nearly 70% decline from AMD’s early 2024 highs. Zooming out further, it’s clear that AMD has a history of enduring deep, multi-month corrections — four such periods since 2014. In each case, the stock not only bounced but did so with strength far surpassing the prior decline. Rallies ranged from +290% to +930%, showing that recoveries in AMD have been far more powerful than the drawdowns that preceded them. While it’s hard to project a move of that magnitude now, history does support the case for a return to previous highs over time once again. Lastly, here’s a relative strength chart comparing AMD to the SMH semiconductor ETF that shows another encouraging trend. AMD has been outperforming its group over the past few months, reversing from an extremely oversold relative position earlier this year. Historically, similar inflection points — where AMD turned up after weak relative performance — have led to multi-month stretches of outperformance versus SMH. Taken together, the technical case for AMD remains constructive. The stock is breaking out of a meaningful pattern, reclaiming key moving averages, showing renewed relative strength, and bouncing back in a way that we’ve seen before. While some short-term digestion wouldn’t be surprising, the setup suggests the broader move higher may still have legs. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
