Yesterday’s trade idea, TSLA, is up nicely today. Keep your eye on that one, and for today…
Last week this tech stock rallied 7% on news of a big licensing deal with Samsung.
After 6 days of digesting that move, it’s ready to surge again.
Continue reading for a trade idea with good news and a great breakout pattern.
As you can see by the chart below Advanced Micro Devices (AMD) has been consolidating for two months and now it’s about to break out of this powerful pattern.
In addition to the 2-month pattern there is a shorter term ‘breakout pattern’ that can work well for setting tight stops.
Yesterday, AMD tried to breakout, but then pulled back along with similar action in the market. This creates a daily low that you can use as a stop on its next breakout attempt.
As a result, the set up is as follows.
Buy a breakout over $30.25. I would not page more than $30.75 in order to keep risk low.
The stop is under $29.00.
AMD also has options that trade well so there are opportunities there too.
Plus, there may be a bonus here.
While I don’t expect real progress on any trade deal with China, AMD does appear to have the opportunity to get an extra boost if the news about the trade war gets better, while at the same time it has held up during the market’s bearish reaction to the trade war worsening.
Rick Nartarian, Chief Investment Officer
The American Investor Daily