Advanced Micro Devices, Inc (NASDAQ:AMD) was rallying about 5% higher at one point on Thursday, in tandem with NVIDIA Corporation (NSDAQ: NVDA), which was spiking up about 3% on a positive reaction to its second-quarter earnings miss.

Nvidia reported earnings per share of 51 cents on revenues of $6.7 billion, which missed the consensus estimate for EPS of $1.25 on revenues of $8.1 billion. Nvidia traded lower in the premarket following the results but ran into a group of buyers when the market opened.

A slew of analysts weighed in on Nvidia on Thursday, all lowering their price targets. The new price targets range from $135 to $225, down from between $150 and $250 prior to Nivida's second-quarter print.

Taking a position in a company through stock or options to play quarterly earnings is risky and can be akin to gambling. Stocks can soar on an earnings miss and fall on a quarterly beat.

Most retail traders have a bullish bias, however, and those who played Nvidia or AMD for a sympathy play may have booked profits on Thursday. The overall trend for both Nvidia and AMD is bearish and traders and investors will want to watch the stocks closely over the coming days to indicate whether Thursday's jump suggests a larger reversal to the upside or if the bounce is merely a bullish move higher in the longer-term downtrend.

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The Advanced Micro Devices Chart: AMD began trading in a downtrend on Aug. 4, with the most recent lower low formed on Wednesday at $90.90 and the most recent confirmed lower high printed at the $101.07 mark on Aug. 18. On Thursday, AMD's spike higher has so far failed to negate the downtrend and the stock may print a lower high under the $101 level over the coming days.

• Bearish traders will be watching for AMD to print a bearish reversal candlestick, such as a doji or shooting star candlestick. If the stock closes the trading day near its high-of-day price, AMD will print a bullish Marubozu candlestick, which may indicate higher prices are in the cards before a potential reversal takes place.
• Bullish traders want to see the higher prices bump AMD up above the most recent lower high, or for AMD to retrace and print a bullish reversal candlestick above the most recent lower low, which would also negate the downtrend.
• AMD has resistance above at $99.82 and $106.99 and support below at $92.75 and $87.45.

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