AMD Stock: Key Levels to Watch After Post-Earnings Plunge

Advanced Micro Devices (AMD) shares tumbled in extended trading on Tuesday after the chipmaker reported third-quarter earnings that missed expectations and issued a light revenue outlook. The stock fell 7.6% to $153.57 in after-hours trading Tuesday, following a 13% year-to-date increase. However, the stock has underperformed the tech-heavy Nasdaq index by about half over the same period. Let's take a closer look at AMD's chart and identify key post-earnings price levels worth watching out for.



Descending Channel in Focus
Since falling below the 200-day moving average in October last year, AMD shares have trended sharply lower within a narrow descending channel. More recently, the price has rallied into the pattern's upper trendline ahead of the company's earnings report, though the relative strength index (RSI) has failed to climb above the 50 threshold, signaling the stock's inability to regain momentum.

Key Support Levels to Watch
The first lower level to watch sits around $162. Although the stock is projected to open slightly below this area on Wednesday, it's worth monitoring if the bulls can defend this area towards the close. A decisive close below this level could see AMD shares tumble to around $132, a location where investors may look for buying opportunities around a series of prices situated near the June swing high and August swing low.

Further selling in the stock opens the door for a more significant drop to the $112 level, around 33% below Tuesday's closing price. Bargain hunters could look to accumulate shares in this location near the pronounced May 2023 swing low.

Key Overhead Area to Monitor
Upon a countertrend rally in the stock, investors should keep track of the $130 level. This region may provide selling pressure near a multi-year horizontal line that joins multiple peaks and troughs on the chart from May 2023 to January this year.

If AMD shares resume their longer-term uptrend, investors should monitor a bars pattern bullish price target around $275. This target is calculated by taking the stock's trend higher from October 2023 to March this year and repositioning it from the early August low.

In conclusion, AMD shares have experienced a significant post-earnings decline, and investors should watch key support levels on the stock's chart around $162, $132, and $112. If the stock resumes its longer-term uptrend, investors should monitor a bars pattern bullish price target around $275. Keep an eye on the $130 level as a potential resistance area during countertrend rallies.