Yahoo Finance

Key Takeaways

• AMD shares gained ground in extended trading on Tuesday after the chipmaker posted first-quarter earnings that surpassed Wall Street expectations, boosted by surging data center sales.

• The stock has rallied toward the upper trendline of a descending channel and 50-day moving average, two indicators that provided significant resistance on the chart in late March.

• Investors should watch major support levels on AMD's chart around $93 and $78, while also monitoring crucial resistance levels near $116 and $132.

Advanced Micro Devices (AMD) shares gained ground in extended trading on Tuesday after the chipmaker posted first-quarter earnings that surpassed Wall Street expectations.

Sales in the company’s data center segment surged 57% in the quarter, helping to allay concerns of a slowdown in AI spending amid uncertainty about what impact the Trump administration’s tariffs will have on global growth. However, the chipmaker cautioned that its results would be affected by charges of roughly $800 million related to tightening export restrictions on sales of its chips to China.

Through Tuesday's close, AMD shares had gained 18% since the start of the year and risen nearly 30% from their April low, far outpacing the performance of the S&P 500 over those periods. The stock rose 1.7% to $100.32 in after-hours trading Tuesday.

Below, we take a closer look at AMD’s chart and apply technical analysis to identify major price levels that investors will likely be watching.

Descending Channel in Focus

AMD shares have trended lower within a descending channel since October last year, tagging the pattern’s upper and lower trendlines on multiple occasions since that time.

More recently, the stock has rallied toward the channel’s upper trendline and 50-day moving average, two indicators that provided significant resistance on the chart in late March.

Meanwhile, the relative strength index (RSI) has recently crossed back above the 50 threshold ahead of the chipmaker’s earnings report to signal improving price momentum.

Let’s point out several major support and resistance levels on AMD’s chart that may come into play.

Major Support Levels to Watch

The first lower level to watch sits around $93. This area on the chart may provide support near the prominent October 2023 low, which also closely aligns with a period of trading activity toward the end of last month.

A failure of bulls to defend this important technical level could see the shares drop to lower support at $78. Investors may seek buy-and-hold opportunities in this region near the stock’s bear trap April low.