$AMC Bull Flag

24 nov 2021

AMC bull flagging above major support level. Looking at the Monthly chart, $35 is strong support, and we are consolidating above that level. Monthly RSI shows a reading of 60.73 currently, which is a tad on the higher end, but certainly not in overbought territory. Monthly MACD shows a lot of upside momentum in this stock, and the breakout of $35 on the monthly chart shows strong buy-side volume.

Zooming into the Weekly chart, we see the same kind of developments, with RSI currently showing a 53 reading, and the MACD having pulled back from extreme levels indicating a drop off in buy-side momentum. The volume has been lighter in this stock for the past 3 months or so, and after earnings failed to move this stock substantially in either direction (AMC posted a worse than expected loss of $0.44 per share on 11/8), I believe this sort of action is indicative of buy-side traders locking in profits, and longer-term investors holding on to their positions, as the stock has failed to sell-off after poor earnings.

Zooming in further to the Daily chart shown above, we see a nice triangle pattern has formed above this $35 level. This pattern can be seen on the Weekly and Monthly charts as well, which is very good confluence and makes this trade much more reliable from a predictive standpoint. Essentially, two scenarios is going to play out: 1) Either we break above the most previous high of $45.95 and re-test the $60 level, and if we break above the all-time high of $72.62 we'd likely test the $80 level; or 2) we breakdown below the $35 level, in which case I see a test of $20-$15 as the next likely targets to downside.

As of right now, this stock is a hold in my opinion, as it is consolidating and deciding where it wants to go next. However, upon the materialization of either a breakout above $46 or a breakdown below $35, warrants a trade in the respective direction. I will be watching this stock closely over the next few days and weeks. Given the stock is consolidating above a previous resistance level and is up-trending, and given the attention that the retail community, WallStreetBets, and the media have given to this play, I would say that I am expecting this to go higher. The current environment also bodes well for such a play, as new movies are coming out in the spring and movie theatres have drawn back a large percentage of their customers.


Full disclosure: I currently have no position in this stock, I have no financial interest or connection to this company, and I am not a financial advisor/planner. These are solely my ideas. Past performance is not indicative of future results. Trading is a risky endeavor, and can result in substantial losses. Exercise due care whenever investing/trading in the market.

5 dic 2021

Nota

Update: Nice breakdown here, would be nice to see a retest of $35 to short and target $30, where we would take off 75% of the position and let 25% run to aim for the $20 target. The stock has spoken, and now we can align ourselves with positions in favor of what it is telling us.