Boston, MA 09/17/2014 (wallstreetpr) – Advanced Micro Devices, Inc. (NYSE: AMD) (Closed: 3.81, Down: 2.56%) had the third consecutive down day and nearly a 12% drop in last 1 month from the August high of $4.32. The fall came on Tuesday with a gap down open and the bears did not show any sign of relenting. As the shadow of the upcoming Alibaba IPO looms large, the fund managers are busy making room for it by selling a lot of tech stocks and performance-wise, Advanced Micro Devices, Inc. (NYSE: AMD) should not rank very high on the list to retain. The big jump in volume of 40 million against an average volume of 30 million clearly shows the increasing intensity of the selloff.
The long term chart would look scary to a lot of investors, but another lot could be very interested in it and in both the cases, the reason would be the huge volatility. In the period of 1989-1999, the stock rose twice by 8 times and 5 times, alternating with cuts of 70% and 90%. Then came the big rise from $8 to $48.50 in just 3 quarters in 1999-2000, ending with a bottom at $3.10 by 2002. The next decade saw another boom to $42.70 by 2006 and another crash to $1.62 in 2008.
The area of $1.60-$2.00 got tested thrice in its lifetime and an investment in that area has always produced a good return to the patient investor. So another dip in that area would qualify as a low risk investment, but the probability of that dip coming must be considered.
The rally from the 2012 bottom of $1.81 had made a top at $4.65 by mid-2013 and the rest of the price action, though saw a higher high at $4.80 in July 2014, has been sideways, implying lack of strength even in this big a bull market in the broader market.
Now a break below $3.80 and $3.65 may drag the price down to $3 levels again and buyers may emerge from the $3.00-$2.50 area. Keep an eye.
