Watch AMD

In my experience, the shares of Advanced Micro Devices are for trading only.  The company is full of good people with sharp minds but in general there is too much political correctness, too many politics, not enough informed vision and even less cohones, especially in management.  The team gets to the 5 yard line and then it walks away from the ball as if a touch down had been made but without putting numbers on the scoreboard.  The poster child for this behavior was the Opteron processor which should have jettisoned AMD out of Intel's shadow once and for all.  But with killer product in hand, AMD just sat there and waited for Intel to catch up and then take the lead.  It was difficult to watch since I worked there at the time.

So even though I am not a big fan of AMD shares as a long term hold, traders will like the fact that they are volatile.  Also, AMD plays the "sucker the investor" game pretty well.  Recently, after 3 decades of focusing on X86, AMD added a big focus on ARM based RISC CPUs.  Yeah, it is a day late and a dollar short given the progress that Nvidia and Qualcomm were allowed to make in this area over the past years, but I expect nothing better from AMD.  Still, a sucker is born every day as the saying goes and by changing its CEO and its focus, AMD might actually get more suckers to invest in its shares.  Hope springs eternal for AMD investors.

In any case, the chart is looking bullish for AMD so I thought I would comment on it.  The chart within a chart below shows the Weekly and Daily charts at the same time.  The weekly chart shows that AMD has not progressed very far from it's 2009 low of $2.  That means it's not too late to make some money here.  The daily chart shows a wave count that I find to be very bullish.

First, I see a multi-year double bottom at 2009 and late 2012 which is slightly inclining.  This is a good sign in and of itself.  From the 2012 low I see a clear 5 wave movement up followed by a 3 wave pullback.  While not shown below, that pullback came to exactly the 50% fib which I think is normal and bullish.  Since then there has been 1 small wave up which I labeled 1/3 and then a small wave down (but a higher low than c) which I labeled 2/3 and now the chart has gone above 1/3.  To me this is a classical Elliot wave setup for a 3rd of 3rd wave in which I expect large gaps up very soon.  I'm talking target price of $7 perhaps before the end of the year here folks.  That's what the power of a 3rd of 3rd is capable of achieving.  No guarantees that it will happen because the herd is never absolutely predictable but I have to go with a bullish 3rd wave setup model on this chart right now.

On the news front, Intel just claimed good earnings numbers so this should encourage AMD gamblers, errrrr, investors.  Another data point here is that the big names of the Dow and S+P are overbought with no growth.  Wal-Mart earnings sucked.  So a "cap rotation" from large caps to small cap stocks would not surprise me here.  Keep in mind that money managers are desperate for yield and they aren't getting it with record low treasury rates putting a wet blanket on the bond market.

If you are an AMD employee with options vested or near vested that are even close to being in the money, hold tight.  You might just get the chance to dump your shares on some hapless fool before this is done.  Of course this is really my view of all stock market shares that do not pay dividends, not just AMD shares.