Thursday's Market Minute: Is AMC Entertainment Primed?

AMC Entertainment AMC was down more than 4% in premarket trading today, erasing much of yesterday’s 7.1% surge in the meme stock favorite. AMC leadership yesterday said admissions were up 15% for the past weekend compared to the same weekend in 2019, and it was one of the top mentions on Reddit for a potential short squeeze.

 

Volatility in this name has been relatively low lately, with Implied Volatility in only the 27th percentile for the past year – and low volatility can be a precursor to high volatility sparked by a breakout in either direction.

From a technical perspective, price hit yearly lows on May 12 for a roughly 85% loss since the yearly highs on Jun. 18, 2021. But AMC has made higher lows since bottoming out and shares have bounced around the 21-Day Exponential Moving Average for a few weeks, with price halting just below this commonly-followed technical indicator yesterday.

 

Volume also has been fairly low, coming in below its 50-Day Simple Moving Average in 10 of the past 11 days and suggesting limited conviction in the recent price action. However, this could be the makings of a bullish Ascending Triangle pattern, characterized by an upward trendline along the lows and horizontal resistance, which would be around 16 in this case.

Other indicators paint a picture of indecision, such as the MACD bouncing showing little directional conviction in either way and the Parabolic SAR switching back and forth during the past few weeks. There are several potentially important resistance levels for traders to watch between 14 to 16, including the 50-Day SMA, the 63-Day EMA, and the previous highs from May 31.

 

For support, traders should watch the lows near 9.70 and be nimble with their stops if things start to slip. If it does break downward, there’s another potential support level in the yearly Linear Regression Line (also known as a line of best fit and suggests fair value) near 9.20.

Image sourced from Wikimedia Commons

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

Posted In: Partner ContentTD AmeritradeEarningsNews

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.