Shares of Advanced Micro Devices, Inc. (NYSE:AMD) have slammed into a wall of resistance. This means they may not move much higher in the short run.
As you can see on the following chart, there is resistance for AMD around $86.50. A large group of investors are trying to sell shares around this level. This has kept a top on the price over the last week.
There is reason why $86.50 is a resistance level. It was a support level in late April and early May.
Now that the price is lower, many of the investors who bought the stock then are now looking at a loss. They decide to sell, but don’t want to lose money.
As a result, they put their sell orders at the same price that they paid for their shares. If there are enough of these remorseful buyers placing sell orders, it will convert the level from support to resistance.
That’s the case here.
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