Advanced Micro Devices
AMD (AMD) shares are looking at some serious technical trouble.
The stock is trading lower by 4% as the worst performing stock in the Nasdaq 100, but that’s the least of its worries.
Three days ago, shares of the semiconductor company formed a bearish pattern when their 20-day moving average crossed below the 50-day. This pattern signals that negative momentum is accelerating and that the trend is likely to carry shares even lower.
The pattern comes as the stock is approaching a critical price level at $160.
AMD shares found support at $160 during the stock’s post-earnings consolidation in February. A break below that price will trigger another round of technical selling that will push the stock towards its next technical support level of $150.
Super Micro Computer
AI Phenom Super Micro Computer (SMCI) is spending its fourth day in a row testing its critical 50-day moving average. Today looks to be the first day we’ll see the stock close below that trendline, which brings pressure.
The stock has dropped 30% from its March 8 highs, slicing through round-numbered support at $1,000 to get to its 50-day.
The 50-day moving average is the best quantified representative of the old saying “the trend is your friend,” so a break below this trendline starts to put that trend into question with investors.
We’re seeing some panic selling in the AI names as investors start feeling a little spooked about a market top. This means shares of Super Micro, Nvidia (NVDA), and other strong performers in the space are likely to see increased volatility force shares lower.
Just as a point of reference, SMCI’s 200-day moving average – the next “key” trendline for the market – is all the way down at $450. We’ll see technical buyers move in to buy the stock before that trendline comes into play.
The price chart for SMCI suggests that a heavy round of selling would take the stock to a price around $750, a good price to open a new position or add to an existing position.
Bumble
From the “Breaking Bad” files, shares of social networking stock Bumble (BMBL) are approaching the $10 price.
I pointed out in my video on Rivian that the market usually increases selling pressure on stocks that cross this simple price point.
Bumble shares have been trolling above $10 since the beginning of March, after a poor earnings report brought the stock crashing lower by 15% in just two days.
The drop was the result of a revenue miss and management’s downside guidance for both the current quarter and the entire 2024 fiscal year.
To add to the situation, the stock is currently sitting directly on a volatility trigger price of $10.47. A break of that specific price will trigger the move below $10 with a price target of $8 in the next four to six weeks.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.