Thursday, 6 April 2017

AMD - Goldman wreck the party

A single analyst at Goldman has wrecked the party for Advanced Micro Devices (AMD), by 'initiating coverage... with a sell rating'. The algo-bots duly smashed AMD (intra low 12.83), with the stock settling lower by a severe -6.3% to $13.28. Near term outlook is very uncertain, as many will be looking to buy, but some will now look to sell on any bounce.

AMD, daily

AMD, monthly


AMD was one of the standout stocks yesterday, and even managed a fractional net daily gain of 1cent, whilst the main market settled moderately lower.

This morning's pre-market announcement from GS that one of their analyst is initiating coverage with a sellside target of $11.00 saw the HFT algo-bots significantly mark down the stock. This spooked the retail speculators, and the stock imploded to a morning low of $12.83.

There was something of a latter day 'cyclical - short term' recovery, but still... a net daily decline of -6.3% is a pretty severe decline. Further, its notable that AMD settled below the 50dma. Technically, there isn't any support until around $12.50. 

With the GS downgrade, there were all sorts of theories flying around...

GS was in an underwater short-AMD trade, and have actively tried to spook the market, so they can close their shorts for a better price.

GS merely wanted to pick up AMD stock at a lower price.

Whether you believe in any of the (overly cynical?) theories out there doesn't much matter. What will matter is whether AMD can impress the market with good earnings in May, and offer positive guidance for the rest of the year.

Here is just one of many out there who are largely dismissive of the Goldman target...


Yours truly... still likes AMD.