New York, November 5th (TradersHuddle.com) - Shares of Advanced Micro Devices, Inc. (NYSE:AMD) ended the trading session lower by $0.05 or -2.34% from its previous close. Advanced Micro Devices' price action developed what can be considered a reversal pattern in the form of a tweezer bottom, which is a candlestick pattern that is usually formed at the end of a downtrend. The tweezer bottom is considered a reversal pattern, so traders will need to monitor the price action for confirmation.
Advanced Micro Devices, Inc. (NYSE:AMD) manufactures semiconductor products. The Company manufactures products that include microprocessors, embedded microprocessors, chipsets, graphics, video and multimedia products. Advanced Micro Devices, the second largest chipmaker in the world, offers its products on a global basis.
Traders looking for an entry in Advanced Micro Devices can use the tweezers as a good reference point to establish the long position, as the pattern provides defined risk by giving a good reference point for support.
Traders look for tweezer bottoms, as they provide an entry with a small defined risk. They are a leading indicator that provide an alert for a trend reversal or stabilization. The tweezers imply that bears or sellers were not able to push the stock lower, therefore providing the opportunity to look for a bounce. Below an example of a Tweezer Bottom reversal pattern:
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