AMD, MU & NVDA

At the request of a TSC member, this article will take a look at the charts for 3 semi-conductor companies. Those 3 companies are Advanced Micro Devices, Micron Technologies & nVidia Corporation, ticker symbols AMD, MU & NVDA respectively.

AMD

This first chart is for Advanced Micro Devices (AMD). It seems to be the “outperformer” of the 3 companies analyzed in this article, at least in the last couple of months. AMD is the only one of the 3 stocks being analyzed that has made a new 52 week high in the last month.

However with a short-term Triangle pattern that developed the last few weeks, the days of its uptrend could be numbered.

AMD may have broken out of the Triangle wave pattern last week. Minimally, the stock needs to make a new high from the breakout, which it did. While AMD has met the minimum requirements for its breakout, the $21.74 – $23.07 price range still appears to be a possible upside target. If this price range is reached though it may be a good time to trim some shares and take some of your gains for AMD.

The buyback area after trimming shares in this range would most likely be the $16 – $17 price range a few months down the road after an anticipated pullback from the $21.74 – $23.07 price range.

MU

This next chart is for Micron Technologies (MU). This analysis will focus on its probable Elliott wave pattern. This is a 3 year weekly candlestick chart for MU.

Wave C could be forming one of 2 corrections at this point:

• The last leg of an Expanded Flat wave pattern
• The middle stages of a Triangle wave pattern

A Triangle wave pattern means MU should find support around the bottom of Wave A. Breaking below Wave A on significant selling volume indicates a probable Expanded Flat wave pattern.

The reversal area for an Expanded Flat wave pattern could be as low as the bottom of the green Wave 4. That is around the $38 price level. Hitting the $38 price level before earnings would be a buying opportunity as long as the MACD Histogram on the weekly chart is showing signs of reversing.

So what happened overall to the Micron trade? I think the trade became way too crowded and rather than continuing its uptrend is forming the Expanded Flat wave pattern to shake out the short-term traders and people that jumped on the trade after Jim Cramer mentioned the stock was going “straight to $75”, which I also thought until I heard his comments.

NVDA

And last we are looking at nVidia Corporation’s (NVDA) charts. NVDA recently received a downgrade. This downgrade comes after the stock has made a tremendous run and after its most recent earnings report.

NVDA’s share price has been forming what appears to be a Megaphone chart pattern over the last several weeks. Megaphone chart patterns are bearish patterns.

Based on previous pullbacks and support areas for NVDA, it appears the $180 – $205 price range could still be possible for the current pullback. It may find initial support around the $225 area, but I do not think that will be the final price target area for the current pullback.

NVDA could have several weeks to months before the opportunity to go long comes around again. Consider locking in some profits for NVDA at current levels early next week before a breakdown from the Megaphone chart pattern happens.

The development of the Megaphone chart pattern right below its previous high is an indicator of a possible longer-term correction. Most corrections are best viewed from the sidelines unless you are sitting on long=term gains and don’t mind sitting through the possible long-term correction.

AMD, MU & NVDA Summary

AMD, MU & NVDA appear to be at different stages of uptrends and pullback areas. And while I do anticipate more highs for AMD short-term, it too could still pullback near-term before continuing its run.

Nothing has been bullish about the market even though the market is still near all-time highs. The last several months the market has seen what I call “rolling tops”. This is a situation when stocks are making their highs at different times before entering into a longer-term consolidation period. A series of rolling tops helps to sustain the market near highs like has been while stocks are really starting to correct. This series of rolling tops is a definite concern for the 9 year bull market.