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AMD versus Intel

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Advanced Micro Devices (NASD:AMD) is up 77 cents on the heels of a bullish article in Barron's over the weekend. According to Barron's, AMD's venture into chips for laptops and new technologies for cell phones and video games, gives the company the chance to grab some of Intel's market share.

Advanced Micro Devices Daily Chart

After losing 72% of its 2000 high, AMD had been slowly trying to recoup those losses in 2001. It took this stock four tries to crack the 38.2% retracement level at $26.43. When it finally did, it stalled at $30.50, and dropped back down to $20. The April rally got AMD moving to the upside again, but this rally failed right at the 61.8% retracement level, $34.50. Since then it's been downhill, losing $20 in two months. AMD is once again trying to mount a rally, but it's an uphill battle. The first test will be resistance at $20, followed by both moving averages, the big gap that formed on July 6th, and a new downtrend. With the stock already 35 cents off today's high, and declining volume on this recent rally, the stock is going to have to make like Avis, and try harder.

AMD/Intel Relative Strength Chart

So which is relatively stronger, AMD or Intel? Intel had the upper hand in 2000, but AMD took was stronger in 2001, well at least until May. For those who don't follow relative strength charts on a regular basis, the big drop from May to July is bad. Until the new down trend is broken, Intel looks like it will raise more, or at least fall less than AMD.

Jeffrey Canavan
Assistant Analyst

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