
Anatomy Of A Trade: AMD +50% Wedge Pop
Oliver Kell
Oliver Kell is a champion trader who achieved an impressive 941% return by winning the 2020 U.S. Investing Championship. With years of active trading experience, Oliver has developed strategies that thrive in both uptrends and downtrends.
September 13, 2024
AMD made Oliver Kell’s focus after it reclaimed the 200-day simple moving average in reaction to an earnings report that became positive after decelerating for a year. This strong action pushed AMD higher as it popped through all of its respective moving averages.
The current market theme included semiconductors as a main component of the Artificial Intelligence build-out with other related stocks performing strongly. In harmony with NVIDIA (NVDA) and other semiconductor stocks, AMD highlighted the importance of their new technology as the stock price entered new highs.
This trade review shares Oliver’s thought process and trade execution throughout AMD’s advance back to previous highs.

AMD Reclaims All Moving Averages
Date: November 1, 2023
AMD Triggered a buy after an earnings report when the price reclaimed all moving averages after a positive earnings reaction. When a strong Wedge Pop occurs, be quick to start building a new position.

Strong Price Confirmation
Date: November 3, 2023
Strong price action after an entry is exactly what you want to see. Let the price confirm your actions.
As the price quickly approaches a resistance zone a new buy area may develop. Oliver waits for backing and filling and looks for an opportunity to increase his position size.

Patience When Extended
Date: November 8, 2023
As the price quickly becomes extended post earnings, it is best to wait for a basing pattern.
Look for an area of resistance, a pullback into support, and then positive price action as it reconfirms higher.

Ignite Bar Means Raise Stops
Date: November 10, 2023
Breaking through a range is not only a new add-on point but also an opportunity to raise stops. When adding to a position, your average cost increases, as well as open risk.
Raising stops when adding to a position finances the new risk. The original position should now be in the money, and ideally with a small profit, as you add on a new buy at a higher price.

Letting It Trend
Date: November 24, 2023
When the moving averages are supporting the price higher, there is nothing to do but let the stock trend. The 10-day exponential moving average has been supporting the series of higher lows, while the 5-day ema has been supporting AMD on a closing basis.

Looking For Real Strength
Date: November 30, 2023
The original buy area has been trending extremely well while the moving averages guide the price higher.
The general market recently found strength off its lows with other leaders emerging and we are now waiting for some real strength to reconfirm higher.

The First Pullback
Date: December 1, 2023
After a second extension from the 5-day ema, AMD finally formed a bull flag on its first pullback into the 20-day exponential moving average.
Remember when a new range like this forms, we are looking for another add-on opportunity if we are trying to increase our size and also looking for a higher low to raise our stops.

Confirmation Higher
Date: December 7, 2023
A positive reaction to news involving a new AI chip gaps the price up.

Past Precedents
Date: December 9, 2023
Looking at the last two candle stick combinations, Oliver sees a pattern when looking back to November 1st and 2nd. This is seen as an opportunity to add on any weakness.
AMD has taken the reigns as the leader in the semiconductor group.

Confirms To New Highs
Date: December 11, 2023
When making a thesis on market movements, retain confidence when the stock’s price action confirms your thoughts.
AMD breaks out of this range and through the previous highs. Note the increase in accumulation volume.

Resting On Light Volume
Date: December 15, 2023
After exploding higher on heavy volume, AMD is now resting with decreased volume.
To give the stock room, Oliver staggered his stops keeping the new add tight at the low of the new breakout area while raising his original position stops to the previous ignite bar.

New Highs Failed
Date: December 19, 2023
After consolidating sideways, AMD tried to push to new highs but failed and closed low in the candle. This is viewed as a sign of weakness as Oliver reconsiders becoming more defensive.

Bear Kicker After Weak Close
Date: December 20, 2023
This type of negative action after a bad close gave Oliver reason to reduce his position. The new add was closed before the stop was hit.

Bull Kicker After Beark Kicker
Date: December 21, 2023
A positive expectation breaker occurs when the price responds positively after weak price action. Oliver re-entered his position here at a higher cost.

Reconfirming Higher
Date: December 26, 2023
Oliver made the most out of this move by having the flexibility to exit and then enter a trade on back-to-back trades.
AMD is now into new highs as the moving averages continue to guide the price higher.

Raising Stops
Date: December 27, 2023
There is no reason to give back anything now as AMD is stronger than the other stocks in the same group.

Broadening Line
Date: December 28, 2023
AMD continues to push higher on multiple gaps up. Olive notes it is extended into a broadening line on both the daily and weekly time frames.
When a price is making new highs into a connected-tops trendline be aware of any chop, resistance, or selling pressure.

Wedge Drop
Date: January 2, 2024
After a second day of resistance at the broadening line, a Wedge Drop changed the trend.
A gap down through the moving averages is more than enough for Oliver to exit the trade.

Wrapping It Up
AMD reclaimed all the moving averages with strength off its lows and is part of the prevalent semiconductor market theme. Oliver viewed this as a Wedge Pop and entered the trade.
After AMD consolidated a strong move, Oliver added more to his position when the price reconfirmed higher.
Adding to your position not only let Oliver make the most of the move but also allowed his risk to be minimized as the original buys were financing his add-ons.
After a 50% move, AMD found resistance at a broadening line and Oliver exited the trade on a Wedge Drop.
Start Learning with TraderLion for free.
Enroll in the Ultimate Trading Guide, get access to fresh course releases, exclusive webinars, and more.
