Watch these AMD price levels as stocks rise after AI-related acquisition

Shares rose more than 4% on Monday

Key recommendations

• Advanced Micro Devices jumped on the news Monday that the chipmaker has bolstered its AI portfolio with a $4.9 billion purchase of data center infrastructure provider ZT Systems.

• AMD shares recently trended higher from the lower trendline of a descending channel, although trading volumes remained below average throughout most of the move, indicating a lack of conviction by larger market participants.

• AMD stock may find support at key chart levels, including $150 and $122, but faces resistance around $184 and $211.

Advanced microdevices (AMD) rose more than 4% on Monday on news that the chipmaker bolstered its artificial intelligence (AI) portfolio with a $4.9 billion cash and stock purchase of data center infrastructure provider ZT Systems.

Since hitting a record high in early March, AMD shares have lost about a quarter of their value, in part on concerns that the chipmaker has failed to capitalize on the booming AI chip market, currently dominated by rival Nvidia (NVDA).

Below, we take a closer look at AMD’s chart and use technical analysis to focus on important price levels that investors are likely to be watching.

Stock trading in the down channel

AMD stock has oscillated in a descending channel since a bear-swallowing pattern marked the stock’s high in early March. More recently, the price trended higher after finding buying interest around the channel’s lower trendline, although trading volumes remained below average throughout most of the move, indicating a lack of conviction from larger participants on the market.

It’s also worth pointing out that the 50-day moving average (MA) crossed below the 200-day MA last week to form an ominous death cross, a chart pattern that predicts lower prices.

Looking ahead, investors should monitor several key support and resistance price levels on AMD’s chart that may come into focus.

Support levels to monitor

An initial support area to watch is around $150, just 3% below Monday’s close. This area may attract buyers looking for entry points near a trendline connecting multiple peaks and troughs between December and July.

A deeper pullback could push shares lower into the $122 area, a chart location where investors can look for buying opportunities near the November high, which also closely aligns with this month’s low.

Areas of resistance to watch

Ongoing buying could lead to a rally to the $184 region just above the channel’s upper trendline, where price could find general resistance near a horizontal line connecting a range of comparable trading levels between January and April with the July swing prominent.

The story continues

A more bullish move could see shares rise to around $211, an area of ​​the chart where sellers could look to take profits near a similar price range just below the record high.

AMD shares gained 4.5% on Monday to close at $155.28.

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