AMD (AMD) reports quarterly results after today's close. Wall Street expects revenue above $13.1 billion and earnings per share of $1.94. Guidance matters most: investors want Q4 revenue above $16 billion and EPS of $2.55.
The Chart
The tech sector has been under pressure as investors question the AI trade. Even so, AMD (AMD) still beats both the SMH semiconductor ETF and the XLK tech sector ETF by a wide margin. AMD is up almost 80% over the past year as of yesterday's close, and it traded up more than 4% in the pre-market.
Among CPU and GPU makers, AMD (AMD) ranks second behind Marvell (MRVL). Intel (INTC), AMD (AMD), and Marvell (MRVL) have all slid hard lately, a rough stretch for several chipmakers.
AMD (AMD) topped out at 658.52 a month or two ago. Since then it has dropped inside a channel shape: a trendline connects the high point, and a parallel copy across the lows marks the lower boundary. Price hit that lower boundary at yesterday's lows, so the pre-market bounce of about 4% could be a reaction off support heading into earnings.
Key Levels
- A gap and the low below it were broken yesterday at 479, which is roughly where price recovered to in the pre-market. This stands out as a support area.
- Another gap and the lows below it mostly held on a closing basis. One push dropped below that level, which sits near 451.
- To the upside, post-earnings highs line up with later highs and lows near 528.
Price has fallen below three shorter-term exponential moving averages: the 5-day, 21-day, and 63-day. The closest is the weekly 5-day at 515.57 as of yesterday's close.
The RSI is moving lower. It sits above the 30 oversold line but below the 50 midline, which leans bearish. The volume profile shows a heavy trading node between about 470 and 528.
The Trade
Given the shaky outlook, a more neutral trade fits. The expected move around earnings is plus or minus about 11% for the week.
The setup is an iron condor expiring November 6th: short the 530 and long the 540 on the call side, short the 435 and long the 425 on the put side. It takes in a 315 credit three days out. That 315 credit is the max profit; max loss is 685, giving roughly a 2-to-1 risk-to-reward.
The break evens sit at 431.85 and 533.15, about 11% and 10% away. Since the expected move is about 11%, those break evens land very close to the edge. The trade wins if AMD (AMD) stays within those boundaries through expiration.
