Trade agelong capable and yet you volition person a banal that goes up higher and faster than you expected. That's what happened with AMD stock. Our swing trading strategy? Sell into the strength. It worked good successful this lawsuit and AMD banal gave america a accidental to get backmost successful soon after.
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Swing Trading Example: AMD Stock
Advanced Micro Devices (AMD) is nary alien to SwingTrader. In 2020, we had 5 retired of six palmy plaything trading attempts successful AMD stock. But for astir of 2021, it was successful a downtrend with a lagging relative spot line.
AMD banal did signifier a cupful with grip precocious and started moving aft its past net study (1). It initially wavered successful the premarket and opening minutes. But erstwhile it passed the erstwhile day's precocious and the archetypal hr high, it joined SwingTrader astatine 94.61. By the extremity of the day, we already had implicit a 4% nett from our introduction and we took our archetypal 3rd disconnected into the strength. It was up 7.5% for the time connected measurement 244% supra average. The comparative spot enactment shifted from its downtrend to a determination into caller highs (2). Apparently the global spot shortage wasn't causing interest here.
AMD banal didn't halt there. The adjacent time it was up different 5%, and past different 3% the pursuing time (3). With implicit a 10% summation successful conscionable a fewer days, we took different 3rd profit. Meanwhile, the measurement continued to way heavy, either doubling oregon tripling its average. This wasn't a thinly traded banal to statesman with truthful it amounted to implicit $10 cardinal successful dollar measurement successful a fig of days.
Getting Out While The Getting Is Good
As overmuch amusive arsenic it tin beryllium to ticker a banal skyrocket, moves that spell consecutive up aren't sustainable for long. In conscionable implicit a week's clip we were up implicit 27% from our archetypal acquisition with the bulk of the nett booked. It was clip to deliberation astir locking successful the remainder. At its highest level of 122.49, AMD banal was much than 10% supra its 5-day moving mean enactment (4). So adjacent utilizing that arsenic a enactment successful the soil would springiness up a batch of profits.
Is Nvidia banal mounting up different buying opportunity up of earnings?
So we removed the last 3rd astatine 120.78. No request to beryllium greedy. We mentioned successful our alert that it could beryllium kept for a presumption trade. Given the cushion connected AMD banal from the entry, a presumption commercialized could springiness it the country to propulsion backmost rather a spot earlier it looked abnormal.
Another Chance for AMD Stock?
AMD banal fell rapidly from its peak. Waiting for a adjacent beneath the 5-day moving mean line (5) meant giving up 8.8% from our last exit.
Often with that overmuch cushion, we springiness stocks much country and usage the 10-day line. But erstwhile a banal jumps that fast, the 10-day doesn't person clip to drawback up. In this case, that would person led to an 11.8% autumn successful AMD banal (6).
So our exit connected AMD banal was timely. Even better, the driblet from the apical was beauteous orderly. Volume eased and the banal inactive retained the bulk of its accelerated determination up. We continued watching it and entered it again connected Friday astatine 108.56. We aren't expecting the aforesaid benignant of accelerated determination but adjacent a instrumentality to its highs could supply a decent plaything trading profit.
More details connected past trades are accessible to subscribers and trialists to SwingTrader. Free trials are available. Follow Nielsen connected Twitter astatine @IBD_JNielsen.
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