AMD just announced a new $6 billion share buyback program, bringing its total authorization up to $10 billion—a bullish move from a fundamental standpoint.
However, while this news might look promising on the surface, technical analysis paints a different picture for short-term traders. Currently, AMD is facing strong resistance near the 200 EMA on the daily chart at 120.80, suggesting a potential downtrend in the near term. Understanding the balance between market sentiment and chart patterns is essential for anyone looking to trade AMD effectively.
Latest AMD News: Share Buyback Boosts Market Confidence
On May 14, AMD revealed a $6 billion share repurchase plan, aimed at increasing shareholder value. Here’s what this means:
- Total buyback authorization now stands at $10 billion
- Share repurchases reduce outstanding shares, increasing earnings per share (EPS)
- Often interpreted as a bullish signal, showing company confidence in its stock
Despite this positive announcement, the market opened with a gap up, suggesting that the good news might have already been priced in. When this happens, traders must be cautious and rely on technical indicators rather than sentiment alone.
Technical Analysis of AMD: Why the Market Might Be Headed Down
Although AMD’s share buyback program is encouraging for long-term investors, technical signals on the daily timeframe indicate potential weakness in the short term.
Key Observations:
- 200 EMA Resistance at 120.80: AMD is struggling to break above this major resistance level.
- Downtrend Confirmation: Price rejection near the 200 EMA signals that sellers are still active.
- Gap-Up Open: This typically creates limited upside as much of the positive news is already reflected in the price.
5 EMA Strategy in Play: Ideal for Swing Traders
For intraday and swing traders, the 5 EMA strategy worked effectively today. Since the market opened higher due to the buyback news but couldn’t sustain momentum, the 5 EMA helped identify the reversal point.
To learn how this strategy works in detail, read this breakdown.
Why It Worked:
Perfect for Gap-Up Days: Avoids fake rallies and helps ride real momentum
Clear Reversal Zones: Helped identify entry points during pullbacks
Supports Trend Confirmation: Confirms when momentum aligns with the dominant trend
Summary Table: AMD Technical Overview
| Technical Factor | Current Status |
|---|---|
| Share Buyback News | $6B announced (Total $10B) |
| Daily 200 EMA Level | 120.80 (acting as resistance) |
| Current Trend | Bearish (near-term) |
| Strategy in Play | 5 EMA |
| Target for Sellers | $115 |
News vs. Technicals: Which Should You Follow?
While the news is undeniably positive, today’s gap-up open suggests it’s already priced in. Trading based purely on headlines can be risky, especially when technical indicators tell another story.
Here’s why you should trust technicals:
- They reflect real-time market behavior
- They identify actual support/resistance zones
- They help manage risk and reward ratios effectively
News is useful for long-term positioning, but in the short term, the market often behaves opposite to public sentiment. Today, the 5 EMA strategy proved its reliability over blindly trading based on positive headlines.
Conclusion: AMD Looks Strong Fundamentally, But Technicals Say Sell
AMD may have announced a powerful $6 billion share buyback, but traders must respect the technical signals. With the 200 EMA at 120.80 acting as resistance, and a potential short-term downtrend, swing traders are eyeing a target near $115. The 5 EMA strategy worked today—and will continue to be useful in similar setups.
👉 Pro Tip: Ignore the hype—stick to your technicals. Follow me on X for real-time entry/exit alerts on AMD and other swing trade setups.