AMD Ankle Weights?
Acquisitions are a big deal. For the most part they are a sign of confidence as major corporations which often do deep due diligence, believe that stocks are cheap. It is a good sign for the overall market as well, as we have seen M&A activity in a diverse group of sectors recently. In healthcare we have seen MYOK and IMMU taken out. In finance MS is buying EV. Within technology we have seen a precedent for the recent AMD liking for XLNX, with the ADI play on MXIM, back in mid July. ADI announced the move on a Monday, as they usually occur, and slumped nearly 6% that session. For most of the last 3 months it traded sideways, essentially “dead money” as investors dealt with opportunity cost watching peers soar higher (interestingly MXIM filled a gap perfectly on 9/25 from the 7/10 session). It did find support at its 200 day SMA and now looks to be on the verge of breaking above a cup base pivot of 127.49. Will the sideways action in ADI somewhat rhyme with AMD going forward? Most likely unless XLNX declares they are not for sale. In any case AMD may have showed were they are weak in certain segments of the space. There may be better opportunities within.