From the looks of things on early Monday morning, the market is set to start some slight gains. Last week, we ended by looking at three companies that traders should consider in technical trouble as we head into earnings. This morning, we’ll hit on three technology companies with charts that are suggesting that bullish breakouts may be on the way.
Today’s Three Big Stock Charts takes a look at the technical setups of Advanced Micro Devices, Inc. (NASDAQ:AMD), Amazon.com, Inc. (NASDAQ:AMZN) and Sprint Corp (NYSE:S) as each company is currently setting-up for what may be a bullish breakout.
Advanced Micro Devices, Inc. (AMD)
AMD has been on a roll over the last year, returning more than 400% on shares over the last 12 months. The semiconductor company has taken a clear lead over rival Intel Corporation (NASDAQ:INTC) on a relative strength basis and it just released a new series of semiconductor chips with positive reviews.
Shares of Advanced Micro have been toying with resistance at $15 for the last two months. AMD shares have maintained momentum, just not the power to break through the chart resistance with authority.
Now, Advanced Micro stock is setting-up for a squeeze play as the trendline that connects the recent highs is on course to intersect with the 50-day moving average. This will lead to a breakout for AMD stock.
The last two trading sessions have seen AMD shares attempt to break above their top Bollinger Band, a move that should put the stock into a bullish volatility move. Currently, this trigger price is at $14.64. Traders should mark this price as a bullish catalyst level as a close above it will open a path for shares to rally to $16.
Amazon.com, Inc. (AMZN)
Our chart analysis has been bullish on Amazon since the turn of the calendar year and now the shares are setting to go parabolic again as fundamentally bullish news regarding AWS is teasing the bulls.
AMZN stock ended last week by breaking into a volatility rally with the move above $860 and the top Bollinger band. This rally is shifting into gear as volume is increasing on the move.
Amazon is still almost a month away from its earnings announcement and AMZN stock is well known for seeing traders “buy the rumor” for weeks ahead of its announcement.
The analysis of the recent Bollinger Band break and Amazon stock’s regression channels (which date back to mid-2014) indicate that an intermediate-term price target of $925 is within reach on this bullish move. We expect that the market will throw some resistance in the way as AMZN shares near $900, but a positive earnings report will surely test $925.
Sprint Corp (S)
Last week we panned Verizon Communications Inc. (NYSE:V) shares as the stock has been tied-up in the migration from dividend yielding stocks into growth names as a result of interest rate uncertainty. One benefactor of the shift has been Sprint.
Although S stock is off of its highs, its shares are still holding technical support from their 100-day moving average and the trend of the 50-day remains neutral instead of bearish as it is with Verizon shares. We’ve been watching Sprint shares draw a tight bottom or floor at $8.25 for the last month as traders have been taking advantage of the dips to buy shares. This is in contrast to the selling that we have seen in shares of AT&T Inc. (NYSE:T) and Verizon on similar dips.
For now, the picture remains positive for S shares as the technicals lend time and support to the stock, while the fundamentals are improving.
The squeeze play that is being created by the intersecting 50- and 100-day moving averages will generate a 5% to 10% move in Sprint shares depending on which trendline gives way first. For now, it appears that the bias is to the upside, which could result in a volatility rally for S stock that could target $9.60.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
