Advanced Micro Devices (AMD) shares rose more than 4% on Monday on news that the chipmaker had bolstered its artificial intelligence (AI) portfolio by purchasing data center infrastructure provider ZT Systems in a deal valued at $4.9 billion in cash and stock.

Since hitting a record high at the close of trading in early March, AMD shares have lost about a quarter of their value, amid concerns that the chipmaker is not benefiting from the booming AI chip market, which is currently dominated by rival Nvidia (NVDA).

Below, we take a closer look at AMD’s chart and use technical analysis to identify key price levels that investors are likely to keep an eye on.

Stock trading in a descending channel

AMD shares have been trading within a descending channel since a bearish engulfing pattern marked the stock’s record high in early March. Recently, the price has trended higher after seeing buying interest around the channel’s lower trendline. However, trading volumes have remained below average throughout most of the move, indicating a lack of conviction among larger market participants.

It is also worth noting that the 50-day moving average (MA) fell below the 200-day MA last week, forming an ominous death cross, a chart pattern that predicts lower prices.

Looking ahead, investors should keep an eye on several key support and resistance price levels on the AMD chart that could come into focus.

Support levels to monitor

An initial support area to watch is around $150, just 3% below Monday’s close. This area could attract buyers looking for entry points near a trend line that connects several highs and lows between December and July.

A deeper decline could take shares to $122, a spot on the chart where investors could look for buying opportunities near the November high, which also closely matches this month’s low.

Resistance areas to watch

Sustained buying could lead to a rally to the $184 area just above the channel’s upper trendline, where the price would likely face overhead resistance near a horizontal line connecting a series of comparable trading levels between January and April to the striking July swing high.

A more optimistic development could see the stock rise to around $211, an area on the chart where sellers could try to lock in profits near similar prices just below the record high.

AMD shares rose 4.5% on Monday to close at $155.28.

The commentary, opinions and analysis expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more information.

At the time of writing, the author does not own any of the securities mentioned above.