AMD: Can It Surge to New Highs Before Year-End? Check the Chart.

AMD stock is hitting multiweek highs. Can it end the year on a powerful note?

Advanced Micro Devices(AMD) opened higher on Monday and almost immediately gave us the rotation we were looking for.

Specifically, I wanted to see if AMD could rotate over $149.02. Not only is that the previous day’s high, but it’s also the previous week’s high.

In other words, clearing this level gave bulls a daily- and weekly-up trigger. Adding to its significance, the highs from the prior two weeks before last week were $147.04 and $147.93, respectively.

Alongside Nvidia (NVDA), AMD has been trading quite well over the past few months.

Bears will say chipmaker AMD's stock has been struggling, while bulls will argue that the stock move is healthy consolidation. Given the trend, I’d have to say I’m in the latter group.

In fact, just earlier this month,I was looking for a pullback to the 50-day moving average.

Amid the recent dip, Jim Cramer -- founder of TheStreet and CNBC commentator -- reminded investors that data centers, and specifically AMD and Nvidia chips,are pockets of strength. That's evident today.

Trading AMD Stock

Daily chart of AMD stock.

AMD climbed 1.6% on Friday. It closed above the 10-day and 21-day moving averages for the first time since Nov. 30.

That’s pretty striking for a stock that has, largely speaking, traded quite well on the long side.

After running from roughly $100 in early October to an all-time high north of $160 in late November, AMD stock desperately needed some consolidation.

Now we’ve had it, and now we have some upside rotation to work with, too.

On the chart above, I put an arrow above the last three weekly highs, emphasizing the importance of the $147 area.

Combined with the finish last week above the 10-day and 21-day moving averages, Monday’s rotation served as a powerful spark to AMD stock, allowing it to quickly rotate over $150.

Now, I know new all-time highs by year-end sounds like a stretch — and it won't be easy — but all we need from here is a 7% rally. And the shares are up 5% so far today, so it’s clearly in the realm of possibility.

Even if it doesn’t come to fruition, we could see AMD stock hit new highs early next year.

Above $164.50 and the bulls may start to look at the upside extension area near $185, where the stock finds its 161.8% extension.

On the downside, let’s see if AMD can hold the 10-day moving average and $147 to $149 area as support.