Wave 4 Elliott Wave Structure

Wave 4 has a double three Elliott Wave structure: wave ((w)) fell to $252.31, wave ((x)) rose to $262.13, and wave ((y)) ended at $235.50. If the stock holds above $224.85, it is expected to increase in wave 5, aiming for a range between $280.50 and $294.40, which aligns with the 123.6%–161.8% inverse retracement level of wave 4. This information is not personalized advice. The author and FXStreet are not responsible for any inaccuracies or omissions and cannot be held liable for any losses or damages. We believe that AMD’s rise from its April 2025 low is not finished, suggesting we should consider taking bullish positions. The recent price action indicates another upward move may occur after the stock hit a low at $235.50. This outlook is backed by AMD’s strong third-quarter earnings report from last week, which exceeded expectations, particularly in data center growth, and offered positive guidance for the holiday season.

Immediate Target for Wave 5

The target for wave 5 is expected to be between $280.50 and $294.40. To take advantage of this, we can buy call options with expiration dates in December 2025 and strike prices around $285 or $290. After the earnings release, implied volatility cooled down, making entry costs for these bullish options more affordable than they were a few weeks ago. Our risk is clearly defined: if AMD drops below the $224.85 level, the bullish outlook is no longer valid. To manage this risk, we can use bull call spreads to limit our upfront costs or sell cash-secured puts with strikes below the recent low of $235.50. This strategy allows us to earn premium while waiting for the anticipated upward movement. The broader market also supports this bullish outlook for AMD, as the semiconductor index (SOX) has risen over 8% since mid-October 2025. We have seen similar situations before, especially during the 2021 market rally, where strong patterns in leading stocks led to broader market gains. Excitement is also building for the upcoming Supercomputing Conference, which we expect will provide new information on AMD’s enterprise AI chips. Create your live VT Markets account and start trading now.

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