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Swing Trade Idea (AMD) – November 21, 2023

Our bearish trade for Tuesday, November 21st is Advanced Micro Devices Inc. (AMD). AMD is part of the Technology Sector, which has performed at 13.12% over the last month, with AMD overperforming at 19.37% over the same period.

The last month has seen a rally in the general equity market and AMD followed this trend in anticipation of the Fed’s dovish outlook on rate increases. The S&P500 seems to have topped and we therefore believe that a pullback is due, which will affect other assets, like AMD, which is also in an overbought condition. Out trade today will therefore collect a premium on a bearish Credit Spread as we believe that AMD will not trade higher over the duration of this trade.

As a close, if AMD were to trade above $123 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $7.36.