Superior Micro Units (AMD) topped Wall Road’s fourth-quarter revenue and income expectations however posted data center sales below estimates, sending the chipmaker’s shares tumbling in prolonged buying and selling on Tuesday.

After-hours promoting intensified when AMD Chief Government Lisa Su mentioned current-quarter information heart gross sales, which is a proxy for the corporate’s artificial intelligence (AI) chip income, will contract about 7% on a sequential foundation. Whereas Su didn’t present a particular forecast for the corporate’s AI chips, she mentioned she anticipates «tens of billions» of {dollars} in gross sales «within the subsequent couple of years.»

By means of Tuesday’s shut, AMD shares had given up a 3rd of their worth over the previous 12 months, weighed down by the chipmaker’s lack of ability to make inroads into AI favourite Nvidia’s (NVDA) dominance of the profitable AI chip market. The inventory fell 9% to about $109 in after-hours buying and selling.

Under, we take a more in-depth have a look at AMD’s chart and use technical analysis to establish key post-earnings value ranges price watching out for.

Descending Channel in Focus

Since falling under the 200-day moving average in October final 12 months, AMD shares have trended sharply decrease inside a slim descending channel.

Extra not too long ago, the worth has rallied into the sample’s higher trendline forward of the corporate’s earnings report, although the relative strength index (RSI) has did not climb above the 50 threshold, signaling the inventory’s lack of ability to regain momentum.

Let’s establish three main support levels that might come into play amid follow-through earnings-driven promoting and likewise level out a key overhead space that will present resistance throughout countertrend rallies.

Main Help Ranges to Watch

The primary decrease degree to look at sits round $110 close to a trendline that connects a collection of peaks and troughs on the chart between Might and October 2023. Though the inventory is projected to open barely under this value on Wednesday, it’s price monitoring if the bulls can defend this space in the direction of the shut.

A decisive shut under this degree might see AMD shares tumble to round $95. This degree on the chart finds assist from a trendline that hyperlinks the Might 2023 pullback low with outstanding troughs in September and October later that 12 months.

Additional downside opens the door for a extra vital drop to the $81 degree, which sits about 32% under Tuesday’s closing value. Discount hunters might look to accumulate shares on this location close to the pronounced Might 2023 swing low.

Key Overhead Space to Monitor

Upon a countertrend rally within the inventory, traders ought to hold observe of the $130 degree. This area could present promoting stress close to a multi-year horizontal line that joins a number of peaks and troughs on the chart from Might 2023 to January this 12 months.

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As of the date this text was written, the writer doesn’t personal any of the above securities.