Stock of the day: AMD

The tale of AMD over the past few months has been a captivating one, with the stock undergoing a bearish correction. This wasn't just any dip; the correction took the form of a classic wedge pattern. For those not in the loop, a wedge in the world of technical analysis often suggests a potential trend reversal or continuation, depending on its orientation and context. In AMD's case, it was a breath of fresh air for the bulls when the stock managed to escape this wedge on the upside, demonstrating resilience and setting the stage for potential gains.

As the stock enjoyed its newfound momentum, it ran into a formidable barrier at the $111 mark. This wasn’t just a number picked out of thin air; it represented a crucial horizontal resistance, a level marked distinctly in blue for its significance. But what makes this resistance particularly tantalizing is its role in a bigger play. If one were to take a step back and view the chart with a broader lens, it appears that AMD might be crafting an inverse head and shoulders pattern. The distinct valleys, marked in yellow, showcase this formation, with the aforementioned blue line acting as the neckline.

But, as with all patterns, the inverse head and shoulders is only confirmed upon a breakout. Right now, AMD's price movement suggests the formation of the right shoulder. It's a pivotal phase, and the bullish momentum will only solidify if the stock manages to breach the blue resistance. This breach would not just signify a breakout from the pattern, but would pave the way for a sustained long-term bullish trend for AMD.