Advanced Micro Devices (AMD) – Get Report and Xilinx (XLNX) – Get Report were on the move Friday as a possible acquisition was in the works.
Shares of Xilinx were up almost 17% at one point Friday on news that AMD was working toward a $30 billion takeout of the company. For its part, AMD stock had fallen about 4% on the news.
The news is coming in fast and furious, with TheStreet’s own Jim Cramer suggesting that Xilinx may not be interested in a buyout.
All of this comes after Nvidia’s (NVDA) – Get Report recent announcement that it will acquire Arm Inc. in a $40 billion deal. Clearly both Nvidia and AMD are looking to spread their dominance and grow through M&A.
What do the charts make of the news? Let’s look.
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On Thursday, AMD stock was rallying into resistance near $87.50. To see Friday’s rejection isn’t all that surprising, although how it acts from here will be interesting.
For instance, a slightly deeper dip puts it into the 20-day and 50-day moving averages. If bulls are really in control, they will buy the dip into this zone and put a retest of $87.50 back in play.
If shares can push through $88, it puts a retest of the high at $94.28 in play, along with the 261.8% extension at $95.71. Above that and $100 is in play, followed by the three-times range extension at $104.31.
Should the 20-day and 50-day moving averages fail as support, the $75 area could be