Key Takeaways

• Advanced Micro Devices shares fell Thursday after gaining ground for six consecutive days amid optimism about recently announced AI deals and share buyback plans.

• Momentum had accelerated in recent trading sessions after the stock broke out above the 50-day moving average and a descending channel, though the relative strength index flashed overbought conditions.

• Investors should watch crucial support levels on AMD's chart around $110 and $96, while also monitoring important resistance levels near $132 and $150.

Source: TradingView.com.

Advanced Micro Devices (AMD) shares fell Thursday after gaining ground for six consecutive days amid optimism about recently announced AI deals and share buyback plans.

The chip designer’s stock rallied to it highest level since early February on Wednesday after the company approved an additional $6 billion to its share repurchase plan, upping its buyback program to $10 billion. The buyback news came on the heels of the chipmaker and AI favorite Nvidia (NVDA) announcing Tuesday they would supply semiconductors to Saudi Arabian AI startup Humain as part of initiatives announced as President Donald Trump kicked off a four-day trip to the Middle East. 

AMD shares fell about 2% to just under $115 on Thursday. The stock is up 50% from its early-April low and has gained 17% since May 6, when the company posted better-than-expected earnings and an upbeat outlook driven by AI momentum.

Below, we take a closer look at the technicals on AMD’s chart and identify crucial price levels worth watching out for.

Momentum Accelerates

Since a bear trap marked the bottom in AMD shares last month, the price has broken out above the 50-day moving average and a descending channel, with gains accelerating in recent trading sessions.

However, while the relative strength index (RSI) confirms bullish price momentum with a reading above the 70 threshold, it also flashes overbought conditions, potentially leading to a period of-near-term consolidation.

Let’s identify crucial support and resistance levels on AMD’s chart that investors will likely be watching.

Crucial Support Levels to Watch

A pullback in the shares could initially bring the $110 level into play. The shares may find support in this area on the chart near the October 2023 swing high, which also closely corresponds with a range of trading activity between February and May this year.

Further downside could see the shares revisit lower support around $96. Investors may seek buying opportunities in this location near a horizontal line that connects three prominent troughs on the chart stretching back to the September 2023 low.

Important Resistance Levels to Monitor

A continuation of stock’s recent bullish momentum could propel a move northward toward $132, This area, currently just above the closely watched 200-day moving average, may provide overhead selling pressure near last August’s notable swing low and January’s countertrend high.

Finally, buying above this level opens the door for a rally up to the important $150 region. Investors who have accumulated AMD shares at lower prices may decide to lock in profits in this location near a trendline that links multiple peaks and troughs on the chart from December 2023 to November last year.