It sometimes so happens that the price action and activity around a stock reaches a decisive stage, from which it can go only one way or another. In other words, it is the moment when the future of a stock is a straight shootout between the bulls and the bears.
The Advanced Micro Devices, Inc. (NASDAQ:AMD) stock has now reached such a stage according to keen observers and hence the stock is now trading within a very narrow range as the squeeze continues. In such a situation, it is only natural for investors to wonder which way this whole thing is going to go in the short term.
Key Analysis
First and foremost, it is important to point out that since Lisa Su took over as the Chief Executive Officer in 2014, AMD has managed to stage a remarkable turnaround. Although the process has been slow, it proved to be highly lucrative for those investors who were patient. The stock has risen steadily over the past three years and rallied from $2 to around $30.
However, at the time, the investors had backed the company’s turnaround but now the story has changed and the turnaround has concluded. The bulls seem to think that the run is going to continue while bears believe that with the conclusion of the turnaround, the stock is all set to fall.
After all, if there is no further upside, then there is no point in holding the stock. This has caused uncertainty in the stock and its price action. Analysts believe that while the turnaround story had resulted in enormous gains for many investors, the stock is now expected to mirror the performance of the broader market. This factor lays credence to the bears’ position and moreover, the small matter of a looming Presidential election needs to be considered as well. Markets are generally flat in the lead-up and hence, analysts believe that although AMD might continue to be range-bound, it is unlikely that it is going to go on a rally.
