Key Disclaimers
This isn’t a worth projection:The worth won’t essentially attain our outlined purchase zone. This plan outlines a structured method for buy-and-hold traders if the value does get there.
Commerce at your personal threat:This plan offers a framework and shouldn’t be taken as funding recommendation.
AMD Inventory Purchase Ranges – With an Instance Price range. Keep the Price range Proportions as Said.
First Purchase Zone:
Worth: $111.08Position Measurement: 20 shares (16.67% of the funds)Price: $2,222
Second Purchase Zone:
Worth: $106.87Position Measurement: 40 shares (33.33% of the funds)Price: $4,191
Third Purchase Zone:
Worth: $101.38Position Measurement: 60 shares (50% of the funds)Price: $6,083
AMD inventory – a ‘purchase the dip’ opinion
Weighted Common Entry Worth (WAP)
If all purchase orders are stuffed:
WAP=(111.08×20)+(106.87×40)+(101.38×60)120text{WAP} = frac{(111.08 instances 20) + (106.87 instances 40) + (101.38 instances 60)}{120}
WAP=120(111.08×20)+(106.87×40)+(101.38×60)
WAP=104.13text{WAP} = 104.13
WAP=104.13
Cease-Loss
Cease-Loss Stage: $95.80(8% beneath the weighted common entry worth)
Danger Per Share
104.13−95.80=8.33104.13 – 95.80 = 8.33
104.13−95.80=8.33
Complete Danger for Full Place
If all 120 shares are bought:
8.33×120=999.628.33 instances 120 = 999.62
8.33×120=999.62
Take-Revenue Ranges
To realize a powerful reward-to-risk ratio (e.g., 6.25:1), we set the revenue goal at 50% above the weighted common entry worth:
Take-Revenue Goal: $156.19
Reward Per Share
156.19−104.13=52.06156.19 – 104.13 = 52.06
156.19−104.13=52.06
Complete Reward for Full Place
52.06×120=6,247.2252.06 instances 120 = 6,247.22
52.06×120=6,247.22
Efficiency Metrics
Danger-to-Reward Ratio:
Complete RewardTotal Danger=6,247.22999.62=6.25:1frac{textual content{Complete Reward}}{textual content{Complete Danger}} = frac{6,247.22}{999.62} = 6.25:1Total RiskTotal Reward=999.626,247.22=6.25:1
Full Place Measurement: $12,495.
Situation Evaluation
1. If All 3 Purchase Orders Are Stuffed:
Common Entry Worth: $104.13Stop-Loss Stage: $95.80Profit Goal: $156.19Reward-to-Danger Ratio: 6.25:1
2. If Solely 2 Purchase Orders Are Stuffed:
Adjusted WAP (First and Second Buys Solely):
WAP=(111.08×20)+(106.87×40)60=108.27text{WAP} = frac{(111.08 instances 20) + (106.87 instances 40)}{60} = 108.27WAP=60(111.08×20)+(106.87×40)=108.27
Cease-Loss Stage: $99.61(8% beneath the brand new WAP)
Revenue Goal: $162.41(50% above the brand new WAP)
Why you need to care about this potential ‘Purchase the Dip’ at AMD inventory
This plan is predicated on an evaluation of institutional quantity profiles and VWAPs, the place shorts are anticipated to cowl their positions and new longs, together with potential institutional consumers, might step in to guard towards additional declines within the inventory worth, alongside recent lengthy positions getting into the market.
Quantity Profile shows the distribution of traded quantity throughout completely different worth ranges, serving to institutional consumers establish key areas of help and resistance the place important market exercise happens. These instruments are essential for establishments as they information choices to optimize entries and exits, decrease slippage, and detect the place massive gamers are more likely to step in.
This commerce plan is structured for long-term buy-and-hold traders who’re in search of a layered entry method into AMD. It goals to seize a powerful risk-to-reward ratio of no less than 6:1, whereas sustaining strict threat administration by way of a clearly outlined stop-loss.
Let me know when you’d like every additional changes or extra particulars!
