Over the last few days fluctuation in the stock of Advanced Micro Devices, Inc. (NASDAQ:AMD) was the main talking point of investors. Analysts often use price and volume data to predict future stock performance. In the case of AMD, the chart has some interesting things to say about where the stock might be headed.How has the stock performed recently?
Advanced Micro Devices, Inc. (NASDAQ:AMD) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of AMD has decreased -2.83%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -469%. After the latest session, which saw the stock close at a price of $11.68, AMD sits below its 52-week high.Momentum indicators
Of course, these surface-level price movements don’t tell us much about the direction that AMD may be headed in the future. To do this, analysts often study the speed and magnitude of a stock’s price movements with what are known as momentum indicators. The logic is that as a stock’s momentum slows, it may be nearing key support or resistance levels and possibly the end of a current trend. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for AMD is 48.08%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 21.22%, tells a different story, and suggests that AMD currently trades in oversold territory.What do the trading volumes reveal?
Volume patterns are useful for gauging the level of conviction behind price changes, and can be used to make predictions about future price movements. A sudden increase in a stock’s activity can be a sign that investors are trading in anticipation of a catalyst, or that investors feel very strongly in one way or the other about the future direction of a stock. Advanced Micro Devices, Inc. (AMD) average trading volume of 65,560,898 during the past month is 0.85% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
AMD is currently undervalued by -21.4% relative to the average 1-year price target of $14.86 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.60, which implies that analysts are generally neutral in their outlook for AMD over the next year.How risky is the stock?
When predicting the future performance for a stock, it’s also important to take into account risk. To do this, analysts often use a stock’s beta, which measures the stock’s volatility relative to the overall market.
Advanced Micro Devices, Inc. (NASDAQ:AMD) has a beta of 2.62, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. AMD therefore has an above average level of market risk. During the past couple of weeks, AMD average daily volatility was 61.39%, which is -10.39 percentage points higher than the average volatility over the past 100 days.